The Reserve Bank of Zimbabwe (RBZ) governor John Mangudya says the newly-introduced Mosi-oa-Tunya gold coin is going to solve the prescribed asset problem for the pensions industry.
The industry has been struggling to comply with the minimum regulatory requirements due to inflationary pressures.
The pension industry has been proposing the issuance of foreign currency bonds with the same status to improve compliance.
Mangudya told NewsDay Business last week that the gold coins will make it possible for the industry to purchase 20 per cent in debt security. He said:
If pension funds buy these gold coins, they are able to take a solid position. Remember it has a liquid asset status as well and can be easily converted to cash. It means that the 20% that they are allowed to purchase in government bond paper can be met. The gold coin is part of that paper that they are supposed to get.
You are aware that they have been saying the available projects have been losing value because of inflation, this gold coin is going to stabilise prices. This also means that the money that they have in the bank is going to have a store of value. They now have the choice of either keeping the cash or the gold coin. Definitely, the gold coin is going to suck all the excess liquidity in the market.
In Zimbabwe, pension funds are required by law to invest at least 20% of their investment portfolio in prescribed assets while life assurers are compelled to invest a minimum regulatory threshold of 15% of their assets in prescribed securities.
Short-term life assurers and pensions are required to invest 10% in prescribed assets.
Mangudya said the gold coin had a prescribed asset and liquid asset statuses.
The government should also consider paying retirement packages for civil servants in gold coins – this would actually give the long serving members a good send-off and an ideal store of value to their pensions
Ummm I don’t see any light from this serial liar Johny boy Panonetsa and his zanu pf handlers. This gold coin based system only works in full functional economies like UAE 🇦🇪, Germany 🇩🇪, Canada 🇨🇦 or South Africa 🇿🇦 not for Zimbabwe, where there is not economy or financial displine. It can’t. Gold coins will only be for the elite not even zanu ordinary praise and worship povo will see them.
Ummm I don’t see any light from this serial liar Johny boy Panonetsa and his zanu pf handlers. This gold coin based system only works in full functional economies like UAE 🇦🇪, Germany 🇩🇪, Canada 🇨🇦 or South Africa 🇿🇦 not for Zimbabwe, where there is not economy or financial displine. It can’t. Gold coins will only be for the elite not even zanu ordinary praise and worship povo will see them.
How much do Zimbabwe pensioners get on monthly bases, what are Zimbabwe civil slave paid. Then before any economic explanations, the answer is that you a creating this gold coin system for ED and band wagon.Shame on you lair.