Zimbabweans hit by soaring inflation: Will gold coins help?

HARARE, Zimbabwe (AP) — After working as an overnight security guard at a church in Harare's impoverished Mabvuku township, Jeffrey Carlos rushes home to help his wife fetch water to sell.

Prolonged water shortages mean most residents of the capital city of more than 2.4 million must source their own water. Carlos is lucky because the property he rents has a well and his family can haul up buckets of water to sell to neighbors.

“This is our gold," he says of the well water.

"If we are lucky, we can sell up to 12 buckets of water (per day) for $2,” said the 50-year-old father of three. That’s about enough money to buy the family’s food for the day, he said.

Rising prices and a fast depreciating currency have pushed many Zimbabweans to the brink, reminding people of when the southern African country faced world-record inflation of 5 billion % in 2008. With inflation jumping from 191% in June to 257% in July, many Zimbabweans fear the country is heading back to such hyperinflation.

To prevent a return of such economic disaster, President Emmerson Mnangagwa's government last month took the unprecedented step of introducing gold coins as legal tender. The country’s central bank, the Reserve Bank of Zimbabwe, said that because the value of the one-ounce, 22-carat coins would be determined by the international price of gold they will help tame the runaway inflation and stabilize the nation's currency.

The glitter of the gold coins is hard to see for Zimbabweans struggling each day to eke out a living. The government sees things differently and is pleading for time.

Although expensive at an average price of just below $2,000 per coin, central bank governor John Mangudya said the coin will have a trickle-down effect that will eventually help average folk.

“The ordinary man...