Zimbabwe has launched gold coins to be sold to the public in a bid to tame runaway inflation that has further eroded the country’s unstable currency.

The unprecedented move was announced Monday by the country's central bank, the Reserve Bank of Zimbabwe, to boost confidence in the local currency.

Trust in Zimbabwe's currency is low after people saw their savings wiped out by hyperinflation in 2008 which reached 5 billion per cent, according to the International Monetary Fund (IMF).

With strong memories of that disastrous inflation, many Zimbabweans today prefer to scramble on the illegal market for scarce US dollars to keep at home as savings or for daily transactions.

And faith in Zimbabwe's currency is already so low that many retailers don't accept it.

The central bank disbursed 2,000 coins to commercial banks on Monday.

The first batch of the coins was minted outside the country but eventually they will be produced locally, according to the governor of the Reserve Bank of Zimbabwe, John Mangudya.

The coins can be used for purchases in shops, depending on whether the shop has enough change, he said.

“The government is trying to moderate the very high demand for the US dollar because this high demand is not being matched by supply,” said Zimbabwean economist Prosper Chitambara.

“The expectation is that ... there will also be moderation in terms of the depreciation of the local currency, which should have some kind of stabilising effect in terms of pricing of goods."

Any individual or company can buy the coins from authorised outlets such as banks, using the local currency or foreign currencies and purchasers can choose to keep the coins at a bank or take them home.

Mosi-oa-Tunya

Called Mosi-oa-Tunya — which in the local Tonga language refers to Victoria Falls — the coins "will have liquid asset status, that is, it will be capable of being easily converted to cash, and will be tradable locally and internationally. The coin may also be used for transactional purposes," said the central bank.

People holding the coins can only trade them for cash after 180 days from the date of buying.

The coins which have a purity of 22 carats, can also be used as security for loans and credit facilities, said the central bank.

The price of the coins will be determined by the international market rate for an ounce of gold, plus 5 per cent for the cost of producing the coin.

At the time of the launch on Monday, the cost of Mosi oa Tunya coin was US$1,824 ($A2,620)

A change but not for the average citizen

Internationally, gold coins are used in countries such as China, South Africa and Australia to hedge against inflation and as an investment opportunity, although they are not as widely used as currency as envisaged by Zimbabwe’s central bank, said Mr Chitambara.

“For Zimbabwe we are in chronic hyperinflation so the expectation is that there will be a huge uptake of these gold coins,” he said.

However, one drawback is that for many Zimbabwe citizens the coins may be outside of the realms of affordability.

“For the common man, there is not really much to benefit directly from this, especially if you don’t have any excess cash," Mr Chitambara said.

"The expectation is that indirectly it will benefit the ordinary person through moderating the prices.”

Companies with excess cash can find the coins useful to store value and also as an alternative investment asset, although individuals and companies are likely to continue preferring the dollar because “it is convenient and highly liquid,” he said.

Selling the coins in fast depreciating local currency could also result in “rent-seeking behaviour, speculation and arbitrage within the economy,” as some could buy using local currency and then sell in dollars later, he said.

The fact that Zimbabwe's central bank would have to buy the gold from miners of the metal such as informal artisanal miners could also present challenges and result in increased smuggling, analysts say.

AP