Browsing: threats to financial inclusion in Zimbabwe

In its latest bid to stabilize the long-volatile Zimbabwean dollar, the Reserve Bank has alighted on a novel solution to Zimbabwe’s currency woes by rolling out gold-backed digital tokens (GBDT) on May 12, 2023. www.theexchange.africa

Are gold-backed digital tokens a threat to Zimbabwe’s financial inclusion? 

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  • RBZ Governor John Mangudya revealed that as of July 21st, the bank had conducted 11 issuances of GBDT.
  • The Governor noted that the bank received 590 applications to purchase tokens equivalent to 325.02Kg of gold.
  • In 2022, as the international economic environment worsened, Zimbabwe turned to gold coins were introduced to tame runaway inflation.

Zimbabwe’s struggles with hyperinflation has since been making headlines for decades. In 2009, inflation was so devastating that the country issued a new Zimbabwean dollar (ZWL), shedding twelve zeros from the earlier currency (ZWD).

By November 2022, the annual consumer price inflation for a compressed basket of goods was at 107 per cent in the country and in June, inflation rose to 175.8 per cent following devaluations of the local currency.

According to the Reserve Bank of Zimbabwe (RBZ) mid-term monetary policy statement, inflation increased to 86.5 per cent and 175.8 per cent in May and …