Gold coins spark excitement from buyers

Zimbabwe To Introduce Gold Coins, Interest Rate Increased To 200% From 80%

Gold coins spark excitement from buyers

The Mosi-oa-Tunya gold coins released for sale on Monday were being sold yesterday for US$1 823 or Z$805 000 but buyers need to go through the know-your-customer process and produce bank statements to show they have the cash on hand since the authorities want only genuine buyers, not people borrowing money and then playing arbitrage games.

However, although most people do not have this sort of money floating around, there are huge expectations that those with huge cash balances, especially in local currency, will now be investing in gold rather than chasing the US dollar on the black market, and that will help strengthen the local currency or at least stop runaway declines in the value of local currency.

Yesterday, a number of people said they were optimistic that the intentions of monetary authorities to stem inflation would be achieved through the sale of the gold coins.

“After learning of the price of the gold coins, I then told myself that I won’t be able to buy these coins given my low earnings,” said Mr Fanuel Nyamasvisva of Mabvuku. “However, I expect the gold coins to stop the decline in the purchasing power of the local currency.

“I am still paid exclusively in Zimbabwe dollars and every month, I can barely pay my rent and I pray that this time, those that have been buying US dollars on the parallel market will invest in gold coins instead to stabilise the local currency and consequently prices.”

Another citizen, Ms Faith Mazambani of Waterfalls, said: “Monetary authorities should rein those that are manipulating the local currency. Now that we have these gold coins, there should be no excuse for anyone caught manipulating the local currency.

“Those people are unnecessarily making the rest of the poor citizens suffer just because they want to make big bucks.”

A number of people visited financial institutions and agencies designated to sell the gold coins seeking to find out how they can participate.

“I heard about gold coins and I am here to find out how I can buy them. I am really interested in them,” said Mr Samuel Fadziso who was at Homelink (Private) Limited in central Harare.

Mrs Gladys Gwaze called for more awareness campaigns on how the gold coins could be obtained so that those without money and the required documentation do not waste time going to enquire, as she did yesterday. “There is need for more education so that people know how this whole thing works,” she said.

Homelink marketing manager Ms Tendai Rafemoyo said: “When you come, we conduct a KYC (know your customer) process and will require your bank statement and we accept all forms of payments in local currency and foreign currency.

“Upon purchase, we give you an accompanying certificate that shows that you are the owner of the coin. The coins have got serial numbers.”

Financial analyst Mr Batanai Matsika said goild coins were “a noble idea to provide people with real investment assets, but it is quite important to ensure that there is no room for arbitraging”.

In an interview on Sunday, economist Mr Persistence Gwanyanya said the gold coins expected were to provide a viable alternative to the US dollar as a store of value.

“This is expected to reduce the demand for the US dollar and thus stabilise the Zimbabwe dollar to the benefit of everyone in the economy,” he said.

Another economist Mr Brains Muchemwa said introducing gold coins was a “noble policy initiative” but said without proper safeguards, which were possible, it could be “hijacked by arbitrageurs whose pursuit of the huge profitable opportunities will crowd out any decent-thinking investors with savings motive”.

It appears the monetary authorities are aware of the dangers with their demand for proof that buyers have the money.

Additional reporting: ZBC News

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