According to RBZ Governor Dr. John Mangudya, the Reserve Bank of Zimbabwe will release GOLD coins later this month, which are anticipated to stabilize the local currency versus major international currencies and benefit regular people by stabilizing commodity prices.
Dr. Mangudya explained the workings of the foreign currency auction system and the measures being put in place to stabilize the Zimbabwe dollar to the Parliamentary Committee on Budget, Finance, and Economic Development. He also stated that the introduction of gold coins, scheduled for July 25, was meant to provide an alternative investment instrument for both individuals and corporations.
“The first step is to make sure that we take in the extra liquidity that the market has available and is being used to store value. As a result, while people were turning to the black market for a store of value, we are providing them with an alternative product—the gold coin—that they can invest in if their transactions are genuine, preventing them from needing to use the black market.
“How will this help the average person? They will gain because, if we avoid the parallel market, the rate there will stabilize, and, assuming all else is equal, the stability that these gold coins will provide will be more advantageous to the average person.”
Money will have value and lead to stable pricing when there is stability, he claimed.
In order to discourage the use of the US dollar as a store of value, Dr. Mangudya stated that the coins will be sold at the current auction or willing buyer willing seller rate.
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