Staff Reporter
Zimbabwe’s gold and foreign currency reserves have reached a combined US$533 million, tripling the local currency in circulation, as the Reserve Bank of Zimbabwe (RBZ) works to stabilise the economy and bolster confidence in the Zimbabwe Gold (ZiG) currency.
In an interview with the media recently, RBZ Governor Dr. John Mushayavanhu attributed the milestone to increased gold production and strategic monetary policies.
“Our gold reserves have grown to 2.67 tonnes, valued at US$228 million, supported by a 21% rise in gold output to 36.48 tonnes in 2024. This growth is a testament to our focus on strengthening the economy through resource-based policies,” he said.
To simplify transactions, the RBZ plans to introduce higher denomination ZiG notes, aligning the cash-to-deposit ratio with regional benchmarks at 5%. Dr. Mushayavanhu assured that the new notes would not compromise economic stability.
“Our approach ensures that cash in circulation remains proportionate to economic activity, further cementing confidence in the ZiG currency,” he said.
The ZiG, introduced in April 2024, has gained traction as a stabilising tool for the economy, with ZiG183 million currently in circulation approximately 5% of reserve money.
The official exchange rate stands at US$1: ZiG24, while the parallel market rate ranges between US$1: ZiG35-38. Analysts view this divergence as a signal of remaining market imbalances but commend the central bank’s efforts.
Economic analyst Tendai Mapuranga highlighted the significance of maintaining robust reserves.
“The accumulation of US$533 million in reserves strengthens the RBZ’s capacity to back the local currency, reducing speculative pressures and supporting de-dollarisation. This is a step in the right direction,” he noted.
Government has also mandated that 50% of mineral royalties be paid in kind, a directive by President Emmerson Mnangagwa aimed at bolstering gold reserves.
Financial analyst Rufaro Muchenje emphasised the importance of this policy.
“Paying royalties in kind secures our reserves and creates a solid foundation for long-term economic sustainability, especially as we work toward building import cover,” she explained.
Regular audits of the gold reserves are underway, with certification expected soon, further enhancing transparency and investor confidence. Analysts believe these measures will reduce exchange rate premiums and anchor price stability.
The reserve growth reflects Zimbabwe’s commitment to leveraging its mineral wealth to stabilise the local economy and reduce reliance on the US dollar, paving the way for sustainable growth.
