Zimbabwe gold reserves rise to $533 million

Zimbabwe's reserves backing the Zimbabwe Gold (ZiG) currency, including foreign currency and gold, have surged to US$533 million following a directive by President Emmerson Mnangagwa requiring 50% of mineral royalties to be paid in kind. This significant increase, which includes 2.67 tonnes of gold worth US$228 million held in the Reserve Bank of Zimbabwe (RBZ)'s vaults, is expected to bolster currency and price stability, as the reserves now surpass the local currency in circulation by more than three times.

When ZiG was launched on April 5, 2024, the RBZ held approximately 1.5 tonnes of gold. The growth in reserves has been fueled by a record gold production of 36.48 tonnes in 2024, marking a 21% rise from 30.10 tonnes in 2023.

Speaking to the media, RBZ Governor Dr. John Mushayavanhu highlighted the importance of this growth.
"Gold production reaching 36.48 tonnes in 2024 has been critical for building foreign reserves through royalties and export earnings. As of January 9, 2025, the available foreign reserves - held in gold and foreign currency - stood at US$533 million, which is over three times the actual reserve money," he said.

The total ZiG currency in circulation currently stands at ZiG183 million, about 5% of the reserve money.
Plans for Higher Denomination Notes

Dr. Mushayavanhu revealed that the RBZ plans to introduce higher denomination notes of the ZiG to facilitate cash transactions while ensuring the volume aligns with economic activity to preserve stability.
"Plans to introduce higher denominations are underway, and the amount will be consistent with the envisaged economic activity," he said.

The RBZ aims to increase the proportion of cash to total deposits to 5%, aligning with regional economic standards.
Stabilising the ZiG Currency

Since its introduction, the ZiG has performed strongly, stabilising the economy between April and August 2024. Although it faced challenges in September, the RBZ implemented monetary measures that narrowed the exchange rate premium from 130% to below 40% by December, restoring confidence in the local currency.

Currently, the official exchange rate stands at US$1: ZiG24, while the parallel market rate is between US$1: ZiG35-38.

"The Reserve Bank remains committed to maintaining the value of the ZiG and implementing measures to preserve its transactional and store-of-value functions while supporting the de-dollarisation journey," Dr. Mushayavanhu added.

The steady growth in gold reserves and the RBZ's proactive measures signal a positive trajectory for Zimbabwe's monetary policy and economic stability.