Economic analysts have said that the introduction of the gold coins also known as Mosi-oa-Tunya coins will help to stabilise the run-away exchange rate as they will be used for valuing the Zimbabwean dollar against the US dollar.
Speaking to this publication, prominent economist Abednigo Matsika expressed optimism that the gold coins would stabilise the exchange rate.
“The Gold coins will definitely help to stabilise the exchange rate but it can only work if all arbitrage opportunities are eliminated.
“So there is need to reduce the premium of arbitration to lower or internationally accepted levels of 15% going down,” he said.
Matsika further hinted that the Reserve Bank of Zimbabwe (RBZ) would have to do away with the Foreign Currency Auction System and abandon control over the Willing Buyer Willing Seller (WBWS) if it is to close loopholes for arbitration.
“As long as the RBZ FCAS remains in place and the RBZ continues to control the WBWS, more arbitration opportunities will be created with the introduction of Gold coins.
“It is my view that the adoption and proper application of the Dutch Auction System in the presence of Gold coins, will ensure that stability of the exchange rate can be achieved, which can be an attraction to holders of USD balances in Banks to trade them officially,” Matsika said.
Meanwhile, the Gold coins, whose roll out are on the 25th of July 2022, will be selling at USD1 800, which is the current approximate value of an ounce of gold on the international market. A 5% will be added to cater for coin production.