Since last year, due to various factors, the inflationary pressure in Zimbabwe, an African country, has been increasing, and the exchange rate of its currency has fluctuated sharply. To this end, the Central Bank of Zimbabwe decided to publicly issue gold coins to the market to curb the depreciation of the local currency and reduce domestic inflation.
Global food and energy prices have continued to soar since last year, and Zimbabwe's domestic food and energy prices have also risen. On the other hand, the Fed's successive aggressive interest rate hikes have led to a sharp depreciation of Zimbabwe's national currency against the US dollar, which directly pushed up the price of imported goods and further increased inflationary pressure in Zimbabwe.
Ma Peimin: I have now come to a large supermarket chain in Harare, the capital of Zimbabwe, and the price of this 10kg cornmeal in my hand is 8290 Zimbabwean dollars, compared with 929 Zimbabwean dollars at this time last year, a price difference of nearly nine times.
Citizen: The price of all goods is rising, everything is expensive.
Citizen: Inflation is the biggest enemy of all consumers, and now I feel that it is very difficult to maintain even the most basic life.
At the end of February last year, the official exchange rate of Zimbabwe's local currency against the US dollar was 124:1, and by February this year, the official exchange rate of Zimbabwe's local currency against the US dollar has become 935:1. Due to the continuous depreciation of the local currency, many Zimbabweans have gone to the black market to exchange foreign currency, and the current exchange rate of Zimbabwe's local currency against the US dollar on the black market has reached 1200:1.
In response to this bad situation, since July last year, the Zimbabwe Reserve Bank of Zimbabwe has issued gold coins called "Thunder, Rain and Mist" and other gold coins and put them on the market for people to buy. On the one hand, these gold coins can be used as a means of preserving the value of the people, on the other hand, they can also remove excess liquidity in the market, thereby effectively curbing inflation.
Mangudia, Governor of the Reserve Bank of Zimbabwe: (Excess money in the market) If it cannot be used to buy gold coins, it will flow to the foreign exchange black market. Our coin sales are open to everyone, whether you are an individual or a company, and the gold reserves that are put on the market can obviously become a means of preserving the value of the public.
The gold coins placed on the market are now gradually working, and the volatile exchange rate of the local currency has begun to stabilize. Since the end of last year, Zimbabwe's domestic inflation rate has fallen month-on-month.
Source: CCTV News Client