You are here

Zimbabwe contemplates restoring its own currency with gold backing

Section: Daily Dispatches

At least until the International Monetary Fund finds out.

* * *

Gold Reserves to Anchor Local Currency

By Walter Nyamukondiwa
The Herald, Harare, Zimbabwe
Tuesday, May 16, 2017

The government is working on a plan to establish a gold reserve to anchor the introduction of a local currency when the right time comes for the return to the Zimbabwe dollar, it has been learnt.

This comes at a time when the country is grappling with cash shortages and economists believe that the issuance of a gold-backed local currency would help stimulate economic activity.

... Dispatch continues below ...



ADVERTISEMENT

Buy metals at GoldMoney and enjoy international storage

GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, ­taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit:

http://www.goldmoney.com/?gmrefcode=gata



Modeled around the $200 million Afreximback facility, which is backing the current bond notes in circulation, the local currency, economists believe, will ease liquidity challenges and stimulate aggregate demand.

Plans to create a gold reserve involve investing in the efficient operations of the government's gold-mining firms, including the Sabi, Elvington, and Jena gold mines. ...

Mines and Mining Development Minister Walter Chidhakwa said the gold reserve would complement the Sovereign Wealth Fund, where a set of minerals would be reserved for future generations.

The legal processes that will give effect to the fund are still before Parliament.

"Naturally, in order to support the introduction of your own currency, you want to have mineral resources that you hold in reserve," said Chidhakwa. ...

Once all the companies owned by the government start operating, Chidhakwa said, they would be required to set aside part of their gold output to be kept as reserve by the Reserve Bank of Zimbabwe. ...

Confederations of Zimbabwe Industries President Busisa Moyo said a gold-backed currency was a sound economic intervention. "If it is along the lines of the Afreximbank facility, then it will give a lot of credibility to the currency because there is depressed demand for goods and products, as people have no cash," said Moyo. ...

... For the remainder of the report:

http://www.herald.co.zw/gold-reserves-to-anchor-local-currency/

* * *

Join GATA here:

International Metal Writers Conference
Sponsored by Cambridge House
Sunday-Monday, May 28-29, 2017
Vancouver Convention Centre, East Building
Canada Place
Vancouver, British Columbia, Canada
http://cambridgehouse.com/event/68/international-metal-writers-conference

GATA Reception at the International Metal Writers Conference
5-8 p.m. Monday, May 29, 2017
Lions Pub
888 West Cordova St.
Vancouver, British Columbia, Canada

New Orleans Investment Conference
Wednesday-Saturday, October 25-28, 2017
Hilton New Orleans Riverside Hotel, New Orleans, Louisiana
http://neworleansconference.com/

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16