RBZ begins selling of smaller gold coins

Banks will from today start selling 4 500 smaller units of the Mosi-oa-Tunya gold coins, with the banking sector yesterday expressing their readiness to trade the coins.

Last week, the Reserve Bank of Zimbabwe (RBZ) announced that banks would start selling the smaller denominations of the gold coins today having disbursed them to banks last Friday and yesterday.

The central bank introduced smaller units of the gold coins to allow ordinary citizens with excess liquidity to also invest in the alternative store of value to the US dollar, the same way cash-rich big investors got such an opportunity when the monetary authorities released the bigger denominations of the gold coins in July this year.

And Bankers Association of Zimbabwe (BAZ) president Fanwell Mutogo yesterday told the Herald newspaper that the smaller units of the Mosi-oa-Tunya will be going into the market today as earlier announced by RBZ.

“What I can tell you is that as previously announced by the Reserve Bank of Zimbabwe, the new small gold coins are coming to the market tomorrow.

“The question that I am not able to answer, which I also refer you to the Reserve Bank of Zimbabwe is whether all banks will be selling the gold coins.

“But as BAZ, we are ready to sell the new smaller units of the gold coins to ordinary citizens,” he said.

The larger units of the bullion coins, one ounce gold coins, have been in circulation since July 25 this year and are being sold to both individuals and corporates in local currency and forex at a price determined by the prevailing international price of gold plus five percent to cover the cost of production and distribution.

Once payment has been received by the selling agent, the buyer of the gold coin has the option to either physically possess it or keep it through bankers of their own choice on the terms and conditions of the custodial service provider.

At the discretion of the holder of the bullion coin, the monetary authority has said, RBZ or its agents would buy back the gold coins with the need to promote a savings culture in Zimbabwe.

In the case of a buy-back, the central bank or its agents (including Fidelity Printers and Refiners and Aurex Jewellery), would request the bearer to surrender the original bearer certificate for the specific coin.

On redemption, residents and non-residents (international buyers) will have the option to request payment in US dollars or Zimbabwe dollars.

In a written response on the sale of smaller denomination gold coins, RBZ Governor Dr John Mangudya yesterday said: “The current terms and conditions of selling the one ounce of coins will remain the same for the lower denominations.”

The smaller units of the Mosi-oa-Tunya bullion coins are being released into the market as earlier advised in the mid-term monetary policy statement of August 11 this year.

Features and characteristics of the smaller units are similar to one-ounce gold coins in circulation save for aspects such as one-tenth ounce with a diameter of 16mm, weight of 3,39g, edge type (fully needed with serial number on face of the coin) and a thickness of 1,2mm — a quarter of an ounce will be 21mm in diameter with a weight of 8,48g, edge type (reeded with serial number engraved) and a thickness of 1,65mm — and half an ounce will have a diameter of 25mm, weight of 16,97g, edge type (reeded with serial number engraved) and a thickness of 2,25mm.

Meanwhile, over 11 000 Mosi-oa-Tunya valued at $11,4 billion have so far been sold with market analysts saying the gold coins have been effective in mopping up excess liquidity from the market while spontaneously offering an alternative investment instrument.

They form part of a cocktail of monetary and fiscal interventions by authorities to stabilise the Zimbabwe dollar exchange rate and rein once resurgent inflation.

Since August this year, both the exchange rate and inflation have largely been stable. –Herald