BY TATIRA ZWINOIRA LEADING economic experts will tomorrow debate whether gold coins could be the answer to Zimbabwe’s currency crisis.
The discussion will be carried on Alpha Media Holdings (AMH)’s Big Debate platform and is set to explore several problems affecting the economy.
AMH are publishers of NewsDay, as well as three weeklies, Zimbabwe Independent, The Standard and the Weekly Digest.
On Monday, the Reserve Bank of Zimbabwe (RBZ) released 2 000 gold coins into the market with a 22-carat value each at a cost of US$1 823,80 and $805 745,35 in the local currency. These coins have two functions, namely, wiping out the huge money supply of nearly $1 trillion and reducing demand for the greenback.
Demand for the greenback is being driven by the depreciating Zimbabwe dollar that has fallen as people seek a more stable currency.
Since the start of the year, the Zimbabwe dollar has fallen significantly from $108,66 on the official market at the beginning of January to $429,30, currently, against the United States dollar. The fall is owing to a lack of confidence, commodity and foreign currency support for the local currency.
This has caused prices of basic commodities to run amok, leading to an inflation peak at 191,6% in June this year, from a previous high of 131,7% in May.
However, the disparity between this rate and its parallel counterpart of US$1:$850 has caused arbitrage that has led black market dealers to make huge profits which will now cascade to the gold coins.
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The potential arbitrage is expected to be discussed at AMH’s ongoing Big Debate series under the topic Will Gold Coins Solve Zimbabwe Inflation?
Among the panellists are Devine Mafa, a Zimbabwean businessman based in the United States and award-winning innovator; Nyasha Mandeya, an economist based in Canada; Chenai Mutambarasere, an economist based in the United Kingdom; and the chief executive officer of the business membership organisation, CEO Roundtable, Kipson Gundani.
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