Cabinet, in liaison with the private sector, has also begun
monitoring the impact the latest interventions will have on the market.
The central bank has sold 31 866 Mosi-oa-Tunya gold coins
since their introduction last year, helping to sterilise more than $25,8
billion.
Last week, 140 kilogrammes of the newly introduced digital
tokens valued at more than $14 billion were taken up by the market.
RBZ Governor Dr John Mangudya told The Sunday Mail that the
huge appetite for gold coins and digital tokens could help remove excess
liquidity and stabilise the Zimbabwe dollar.
“The purpose of digital gold tokens, just like the physical
gold coins, is to store value, act as an investment tool and mop up excess
liquidity from the market,” said Dr Mangudya.
“The reason the parallel market exchange rate goes up is
because we are a dual-currency economy.
“In a dual-currency economy, where there is a local
currency and the US dollar, many will obviously find the US dollar as the most
attractive.”
The recent run on the Zimbabwe dollar, he said, was caused
by those with excess money in local currency, who were opting to store value of
their cash in foreign currency, thereby driving the depreciation of the local
unit.
“By providing digital gold tokens, we are saying do not go
to the parallel market, but store value in the coins and tokens, which are
known worldwide as a store of value.
“Therefore, it is working very well, because the demand for
the gold coins is higher than the supply, while the electronic version is
actually working very well.
“About $14 billion was used to purchase digital gold
tokens.
“That money could have gone into the parallel market but
was not channelled there and was used to buy digital gold tokens. So, it is
working.”
Dr Mangudya also said measures that were announced by
Treasury on Thursday to stabilise the exchange rate and tame rising prices of
goods and services were likely to complement the central bank’s initiatives.
Last week, Government lifted restrictions on the
importation of basic commodities, while granting companies 100 percent
retention of domestic foreign currency sales as part of a cocktail of measures
to contain resurgent volatility in the exchange rate and prices.
The foreign currency auction system will be further
fine-tuned to facilitate the efficient allocation of resources to the market.
Monetary authorities are also expected to review interest
rates to discourage speculative short-term borrowing.
Added Dr Mangudya: “The new measures announced by the
Ministry of Finance, including the 100 percent retention of domestic foreign
currency earnings, are for three reasons, which means, for starters, companies
can now bank their money (forex).
“They were not banking their money, so the new measure
promotes deposits into the banking sector and increases liquidity in the
banking sector.
“Also, companies can now use their own money for
importation, thereby reducing demand for foreign currency on the auction
system.
“This buttresses and supports the issuance of gold coins
and tokens, as it seeks to reduce the demand for foreign currency.”
Mr Persistence Gwanyanya, an economist and member of the
central bank’s Monetary Policy Committee, is confident that the gold-backed
digital tokens will help stabilise the Zimbabwe dollar.
“Retailers and wholesalers see the gold digital tokens
salvaging their businesses from the accelerated depreciation of the local
currency,” he said.
“They have been losing competitive advantage to small and
informal businesses that have been rejecting the currency and insisting on
transacting in US dollars.
“Given their visibility and position in the market, it is
very difficult for them to reject the local currency without consequences.
“The acceptance of digital gold-backed tokens by key
wholesalers and retailers will be a huge relief to the transacting public.”
The gold tokens are being introduced in two phases.
The first phase entails issuing gold tokens with a vesting
period of 180 days for investment purposes.
The second phase involves issuing gold-backed digital
tokens held in either e-gold wallets or e-gold cards being tradable and capable
of facilitating person-to-person transactions.
Meanwhile, the Cabinet committee set up to investigate the
recent price hikes of basic commodities has begun monitoring the market’s
reaction to Government’s latest interventions.
Industry and Commerce Minister Dr Sekai Nzenza, who chairs
the committee, said: “The Cabinet committee led by myself as chairperson will
continue to monitor prices of basic commodities and receive information and
recommendations from the private sector.
“The main objective is to ensure that the consumer has
access to affordable basic commodities.
“My ministry will continue to engage business associations
on various platforms.” Sunday Mail
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