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Friday, July 28, 2017

Return of Gold Backed Currency to Begin in Zimbabwe, 28 JULY

7/27/2017 10:58:00 PM  News  

Return of a gold backed currency could begin in Zimbabwe as government looks at finally stabilizing Zimdollar

7:30 AM

The African nation of Zimbabwe has long been the poster child of fiat currency failures. It first began when Mugabe hyper-inflated their 'dollar' in the late 1990's, and then was followed by the country simply going on a U.S. dollar standard that failed during the years leading up to, and following the 2008 financial crisis.

Then more recently Zimbabwe has tried to tether their currency to the RMB with limited results.

So after three failed attempts to stabilize their monetary system over a 20 year period it appears that President Mugabe is now considering a return to a gold standard, and could be the first country in over 45 years to back their money with precious metals.

Government is working on a plan to establish a gold reserve set to anchor the introduction of a local currency when the right time comes for the return to the Zimdollar, it has been learnt.

This comes at a time when the country is grappling with cash shortages and economists believe the issuance of a gold backed local currency would help stimulate economic activity.

Modelled around the $200 million Afreximbank facility, which is backing the current bond notes in circulation, economists believe the local currency will ease liquidity challenges and stimulate aggregate demand.

Plans to create a gold reserve involve investing in the efficient operations of Government's gold mining firms, including Sabi, Elvington and Jena gold mines. - All Africa


http://www.thedailyeconomist.com/2017/05/return-of-gold-backed-currency-could.html

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Gold reserves to back currency

July 28, 2017     VP Mnangagwa

From George Maponga in CHIREDZI
Government is building diamond and gold reserves to back the local currency upon its re-introduction in future, Vice-President Emmerson Mnangagwa has said. VP Mnangagwa refused to disclose when the local currency would be re-introduced, but said it would only come back when mineral reserves reached desired levels.

He was speaking during an advocacy meeting on the new Constitution that was organised by the Ministry of Justice, Legal and Parliamentary Affairs in Chiredzi.

VP Mnangagwa oversees the Justice Ministry.

Responding to questions on the prevailing cash shortages, the Vice President said Government was working on ways to stem the shortages.

“We are building reserves of gold and diamonds which if they reach a certain level I will not tell you here, it will then allow us to introduce our own currency that will be backed by those minerals.
 I am not at liberty to disclose to you the level that we want those minerals to reach before they can back our own currency,’’ said VP Mnangagwa.

He narrated the history of cash shortages in Zimbabwe saying problems started after the country embarked on the land reform programme. He said Government introduced bond notes to plug the smuggling of the US dollar outside the country.

“We only get foreign currency when we export something or through NGOs that come into our country. Forex also comes from bilateral and multilateral financial support or through Foreign Direct Investment and if we do not get this there will be no forex because the US dollar that we are using is a reserve currency,” he said.

VP Mnangagwa also said Government was concerned that bond notes were now being found in some neighbouring countries, saying investigations of how they ended up there were ongoing.

He revealed that the Chiredzi leg of his ministry’s visit was the first in a series of nationwide new Constitution advocacy meetings at district level.

http://www.herald.co.zw/gold-reserves-to-back-currency/

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