Zimbabwe’s central bank has taken an unusual step to curb the inflation that has been plaguing the country for years — and it’s considered one of the highest in the world.
Amid an abrupt drop in the value of the national currency, the institution began to mint gold coins.
The central bank more than doubled interest rates — a measure taken to deal with inflation — to 200% this month after the annual rate of inflation rose above 190%.
According to the International Monetary Fund (IMF), Zimbabwe recorded the third highest inflation in the world in 2021, behind only Venezuela and Sudan.
Each gold coin will cost the price of one ounce of gold on the international market, plus 5% production cost.
Last Friday (22/07), an ounce was worth about US$ 1,724.
According to the governor of the central bank of Zimbabwe, John Mangudya, it will be possible to use the coins in stores, if they have enough change.
The coin is called “Mosi-oa-Tunya”, a term meaning “Smoke That Thunders” — a reference to Victoria Falls, on the border between Zimbabwe and Zambia.
The value of the Zimbabwe dollar has plummeted against major currencies this year.
The country still remembers the economic chaos under the late Robert Mugabe’s regime, who ruled for nearly four decades.
Hyperinflation forced the government to ditch the Zimbabwe dollar in 2009 — and led the country to use foreign currencies, most notably the US dollar.
During the worst moment of the crisis, the government stopped publishing official inflation figures, but one estimate put the annual inflation rate at 89.7 sextillion percent in mid-November 2008.
At the time, Zimbabwe’s one hundred billion dollar bill was seen as an emblem of the country’s economic collapse.
The local currency was reintroduced a decade later, but quickly lost value again.
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