The central bank of the southeast African nation of Zimbabwe has issued a solid gold coin intended to “expand the value-preserving instruments available in the economy.”

The coin sales had totaled as much as 25 billion Zimbabwean dollars through March and “aided the dissipation of domestic inflationary pressures,” the bank said in a recent statement.

Beginning in November, the gold coins will be redeemable for the country’s new digital currency that is backed by gold in the central bank’s reserves.

Zimbabwe produced about 35 million tons of gold last year, much of which was bought by the central bank.

Gold equaled its record price of $2,072 per ounce earlier this month. It was trading at TK at 5 p.m. U.S. EDT on 15 March.

The value of Zimbabwe’s coin is tied to the official value of Zimbabwe’s currency, which has been sinking like the Titanic in recent months.

Zimbabwe uses both its own dollar and the U.S. dollar as domestic currency.  Zimbabwe’s official exchange rate is 1,000 of its dollars for one U.S. dollar, but the black market rate recently reached 2,200.

Zimbabwe blends the two currencies to tally its official inflation rate, which was most recently gauged at 87 percent. The rate is far higher for Zimbabwe’s buck on its own.

To beat down inflation, the Reserve Bank of Zimbabwe has set its interest rate at 140 percent.

The new coin “has nothing to do with what’s happening on the ground,” economist Tinashe Murapata complained to the Financial Times. “It is a sideshow.”

The currency’s destruction is largely due to the government’s unrestrained printing of money, economists told the FT. 

The country has been beset by hyperinflation since the Great Recession led to the collapse of Zimbabwe’s currency and the creation of a new Zimbabwean dollar in 2019 by the government that replaced dictator Robert Mugabe.

TRENDPOST: We note this article to emphasize the decline of the U.S. dollar and that more nations will be backing their currencies with gold… which will in turn push gold prices higher and more central banks shore up their currencies with gold deposits.