It is doubtful whether the procedure in Zimbabwe would have any effect. Who can afford an 1800 dollar gold coin?
Why? Zimbabwe wants to issue a gold coin to combat the hyperinflation that has been rampant for years. Thanks to coins made from the gold mined in the country, prices should become more stable, according to the government of the South African country. The coin is said to cost around $1800. The government hopes that as many gold coins as possible will be paid in dollars and that you will get foreign currency in this way. The currency may not be resold for six months after purchase.
If people can no longer buy bread, the government may be shaken, too.
Who can bear this? Few people can afford $1,800 of gold in Zimbabwe, with a per capita GDP of just over $1,200 and 40 percent of people living below the poverty line. “For example, people who are involved in the gold trade or other trade,” says Navina Kotor, a freelance journalist in Kenya. Zimbabwe’s hyperinflation has meant that no one wants the local currency anymore – because it loses a lot of its value very quickly. In some places, prices in local currency are much higher than in dollars. Merchants want to make sure that as many of their goods as possible are paid in dollars and that they get foreign currency.
How is hyperinflation manifested? Prices in Zimbabwe are rising steadily and sharply, especially in recent times, prices for imported goods have risen again. Middle-class people like teachers and nurses can only afford half of what they could afford a short time ago. That’s why there have been protests in Zimbabwe recently. Half of the salaries were demanded to be paid in dollars.
Why is the government working now? “If people can no longer buy bread, the system and the government may be shaken,” says journalist Navina Kotor. Therefore, the economy must stabilize. However, it is unclear if the gold coin can help. The International Monetary Fund described the measure with a gold coin as “extraordinary”.
At the same time, he stressed that hyperinflation in Zimbabwe cannot be controlled with a single action. Instead, a comprehensive package of measures is needed, in which corruption and the issue of public funds must be addressed. “This is the only way to restore confidence in the Zimbabwean economy,” says Kotor.
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