RBZ avails gold coin purchase guidelines

THE Reserve Bank of Zimbabwe (RBZ) has released guidelines for the purchase of the Mosi-oa-Tunya gold coin, set to hit the streets next Monday.

The guidelines will prohibit banks from buying the gold coins for their own portfolios, unless permitted by the central bank.

In a bid to save the local currency from collapse and also halt soaring inflation, the central bank introduced the gold coins, described by critics as elitist and possibly a looting scheme.

Using the current London Bullion Market Association prices, the gold coins will cost US$1 749,77 per ounce and with the US dollar trading at $392 at the government currency auction system, buyers have to fork out about $685 909,84 to purchase one ounce or $1,6 million at the parallel market rate.

According to the guidelines released by the central bank on Monday, the apex bank will appoint agents that include authorised dealers, its subsidiaries and foreign banks that will be responsible for selling the 22-carat gold coins on its behalf.

All sales of the gold coin, weighing 33,93g, by the agents would be subject to normal know-your-customer (KYC) principles in line with international best practice, which include declaration of the source of funds.

“The gold coins shall be sold at prevailing international price of gold plus 5% to cover the cost of production and distribution of the coin on a payment vs delivery basis,” the guidelines read in part.

“The bank shall publish the Mosi-oa-Tunya gold coin price by 0800 hours daily, which shall be based on the previous day’s London Bullion Market Association (LBMA) PM Fix plus the cost of producing the coin. The Mosi-oa-Tunya gold coins shall be sold with an accompanying bearer certificate with security features.”

The RBZ said agents shall sell the Mosi-oa-Tunya gold coins in both local currency and United States dollars and other tradable or denominated foreign currencies at the willing-buyer willing-seller exchange rate.

Denominated currencies for the purpose of buying gold coins will include the British pound, the euro, US dollar, Australian dollar, Botswana pula and South African rand.

The agent shall transfer to the Reserve Bank within 24 hours, the amounts received from purchasers in the currencies of purchase.

The central bank said domestic buyers, including individuals, may buy in local currency or foreign currency.

“Domestic corporates, including institutional investors, will be allowed to buy gold coins in local currency or foreign currency, subject to quantity restrictions where it is deemed necessary,” the RBZ said.

“Exporting entities shall buy Mosi-oa-Tunya gold coins in foreign currency, from their retained export portions. Notwithstanding this requirement, exporters whose annual export receipts in 2021 were less than US$1 million, shall require a specific exchange control approval to be permitted to utilise a portion of their surrender portion that is payable in local currency, to purchase the gold coins.”

The RBZ said local banking institutions shall not be allowed to buy the gold coins for their own portfolios up until such a time the apex bank grants permission.

“Thus for the time being, banks can only receive the coins from the Reserve Bank for onward selling to their customers on behalf of the Reserve Bank; and non-resident (international) buyers shall only buy the Mosi-oa-Tunya gold coins in denominated foreign currencies,” it said.

Once payment has been received by the agent through normal banking channels, the RBZ said buyers would be allowed to take physical possession and ownership of the gold coin or opt to keep the gold coin through a registered bank (custodial services) on terms and conditions of the service
provider.

It said at the discretion of the holder of the gold coin, the bank or its agents will buy back the gold coins after a vesting period of 180 days in line with the need to promote a savings culture in the country.

“Disbursements of gold coins to agents of the bank shall be determined by the rating and size of the agent, as well as the demand and supply of gold coins. Agents are expected to provide daily returns to the bank for monitoring and compliance. The relevant templates shall be provided to the appointed agents,” RBZ said.

The central bank said residents and international buyers shall be allowed to take out (export) the gold coins supported by the bearer certificate for each coin.

The gold coin shall have the qualities such as liquid asset status, prescribed asset status, collateral acceptability, tradable, serial numbering, and central bank buy-back when required by the holder of the gold coin.-newsday