HARARE – Zimbabwe’s reserves backing the Zimbabwe Gold (ZiG) currency have risen to US$533 million, bolstered by increased foreign currency earnings and gold holdings.
This growth follows President Emmerson Mnangagwa’s directive to allocate 50 percent of mineral royalties to be paid in kind, enhancing the country’s ability to stabilize its currency and economy.
The Reserve Bank of Zimbabwe (RBZ) now holds 2.67 tonnes of gold, valued at US$228 million, within its vaults. These reserves represent more than three times the amount of local currency in circulation, a critical factor in anchoring currency and price stability.
At the launch of the ZiG currency on April 5, 2024, the central bank’s gold reserves stood at approximately 1.5 tonnes. Today, the ZiG in circulation amounts to ZiG183 million, constituting 5 percent of the reserve money, which includes cash held by the public and commercial bank reserves at the RBZ.
Gold production in Zimbabwe reached a historic 36.48 tonnes in 2024, marking a 21 percent increase from the 30.10 tonnes produced in 2023. This surge has been pivotal in strengthening the RBZ’s foreign reserves through increased royalties and foreign currency earnings from exports.
Speaking to the Harare Bureau, according to The Sunday Mail, RBZ Governor Dr. John Mushayavanhu stated: “Indeed, the country’s gold production reached a record level of 36.48 tonnes in 2024, reflecting a 21 percent increase from the previous year’s output. The boost in gold output has been vital for the Reserve Bank to build foreign reserves through royalties and export earnings, critical for backing ZiG. As of January 9, 2025, our foreign reserves in gold and foreign currency cash stood at about US$533 million, exceeding three times the actual reserve money.”
Dr. Mushayavanhu revealed that the central bank is considering introducing higher denomination ZiG notes to facilitate easier cash transactions. However, he emphasized that the rollout would align with economic activity to maintain stability.
“Plans to introduce higher denominations are underway, and the amount to be introduced will be optimal and consistent with projected economic activity,” he said.
The RBZ also aims to progressively increase the proportion of cash to total deposits to 5 percent, aligning with similar economic structures in the region.
Since its inception in April 2024, the ZiG currency has contributed significantly to economic stability, particularly between April and August 2024. The currency’s strong performance and the country’s robust gold production are expected to sustain economic resilience in the future.
The RBZ’s strategic accumulation of reserves underscores the government’s commitment to strengthening Zimbabwe’s monetary framework and ensuring a stable economic environment.
