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ZEGU Economics Lecturer Lists Conditions For Gold Coins To Stabilise The Economy

ZEGU Economics Lecturer Lists Conditions For Gold Coins To Stabilise The Economy

Courage Masona, an economist and lecturer at the Zimbabwe Ezekiel Guti University (ZEGU) has said that the recently-introduced Mosi-oa-Tunya gold coins curb the runaway inflation in Zimbabwe if certain conditions are met.

He speaks as analysts are contradicting each on the subject matter. Below are the conditions he highlighted in an article posted in the Opinion column of The Standard that was published this Sunday:

i). there is a certain level of creativity required at the apex bank, to close every arbitrage opportunity.

ii). the gold coins must be convenient to use and very liquid as well. They must not just perform the store of value function of a currency but also work as a medium of exchange.

iii) the governor faces a formidable task each day to try and manage the money supply, at a time when elections are fast approaching. It is during this time that economies experience political business cycles. A restrictive monetary policy is always desirable in an economy with too much liquidity.

iv). there is a need to boost public confidence and trust in the economy if gold coins are to succeed.

Zimbabwe introduced the coins on 25 July in a bid to stabilise the economy by easing demand for US dollars and storing the value of money after the Zimbabwe dollar lost more than two-thirds of its value against the USD this year.

In the first week, RBZ sold 1 500 gold coins during the first week of their release into the market.

Internationally, gold coins are used in countries such as China, America, Canada and Australia among others.

These other countries, however, unlike Zimbabwe, have relatively stable macroeconomic environments.

Masona also said it is difficult for one to predict the outcomes of a policy with precision hence the need for fellow economists to resist the “pretence of exact knowledge” in economic analysis.

He added that no economics model would ever render fully intelligible the causes of market outcomes or the consequences of government policies.

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16 Comments

Kule Dhambi 1 month ago

It will not work. Simpuu!!


1 month ago

KO ba Ezekiel Guti hw is life ?


Ezekiel Guti 1 month ago

Diri bho mzukuru.

Golddigger 1 month ago

Who sells gold( for Zim dollars that are in free fall losing value on a weekly basis) . Doesn't make economic sense at all.


Kirk 1 month ago

That's why they are sold in USD not RTGS.


Golddigger 1 month ago

90% were paid for with Zim dollar according to RBZ

Dr Malcom 1 month ago

We supported these people whn they took over but now we ve realised tht they have nothing to offer. Zero on promises made. Totally nothing


Sabhuku 1 month ago

Over 90% coin was bought with RTGS, evidently this scheme is for the looters to clean & preserve their loot. This was never to benefit the economy or public


Gold 1 month ago

Gold sold for next to nothing

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Jah🇿🇼Tsvarie-07 1 month ago

The true has been said that no economists can fore see the consequences of policies period.


Jah🇿🇼Tsvarie-07 1 month ago

The truth has been said that no economists can fore see the consequences of policies period.


Mwana waMambo 1 month ago

Zvezanu here izvi, hapana chobupo apo. Kuvaraidza ruzhinji kuti vawane kuba chete. Reserve bank of zanu governor ndiro rimwe zitsotsi. Hapana c****ngwa chichibuda apo.


Manikiniki 1 month ago

They are looting the Gold these Zanu bigwigs nxaaa! The ordinary citizen will just watch from the terraces with his 40 000rtgs monthly salary.


Cde hondo 1 month ago

Musatambe ne vanhu. How many zimbos have money to save in their banks. Majority is struggling to buy a loaf of bread and yu expect them to buy gold coins, Ed and your team itai mushe


Nimrod 1 month ago

Ko say $zwl richingodzika every week pa auction? lts a clear sign that it's not working. tichamirira kunzwa zimstats nezve inflation. last time it was 257% muna June or July...not sure


masvingo 1 month ago

ini hangu handihwisisi zvemagold coins. izvi



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