Zimbabwe's foreign currency reserves surge as ZiG gains stability

Zimbabwe's efforts to stabilise its local currency, the Zimbabwe Gold (ZiG), have begun yielding tangible results, with the country's foreign currency reserves exceeding US$600 million, the Reserve Bank of Zimbabwe (RBZ) has announced.

In its latest monetary report, the RBZ revealed that by the end of March 2025, Zimbabwe's foreign reserves had more than doubled from around US$270 million in April 2024, when the ZiG was launched as a structured currency to replace the Zimbabwe dollar.

The surge in reserves is being widely hailed as a critical step toward restoring confidence in the local currency and bringing price stability to the economy.

According to the central bank, the current reserve levels are sufficient to fully cover all ZiG bank deposits, ensuring that the currency is backed by tangible foreign assets. This development, the RBZ noted, helps insulate the ZiG from speculative pressures and global market volatility.

Financial experts and industry leaders have commended the central bank's approach.

Zachary Tambudzai, Executive Dean of the Faculty of Commerce at Bindura University of Science Education, described the reserve growth as a "huge milestone."

"It reflects how the central bank is walking the talk by accumulating more reserves to anchor the local currency," Tambudzai said.

"The overall stability we are seeing means monetary authorities are staying the course of prudent systems to secure the ZiG."

Confederation of Zimbabwe Industries (CZI) president, Mucha Mukanganwi, echoed similar sentiments, stressing that a stable currency is essential for industrial growth.

"Industry thrives on certainty. A stable currency that gives direction for future planning is critical," Mukanganwi said.

"The current trend shows that the tight monetary policy is working, and while not everyone may be on board, the RBZ is clearly following through step by step."

The central bank also reported a significant drop in exchange rate premiums on the parallel market, which have declined from over 100% in September 2024 to just 20% by March 2025.

The ZiG exchange rate has also remained relatively stable, trading at around 33 to 34 ZiG per US dollar, reflecting improved market confidence and reduced speculation.

RBZ Governor Dr. John Mushayavanhu, who has championed the structured currency model, has previously stated that reserve-backed monetary policy is key to long-term stability.

With the structured currency increasingly finding its footing, economists believe Zimbabwe may now be entering a phase of greater macroeconomic predictability.

As reserves continue to build and inflation remains under control, the ZiG could emerge as a reliable foundation for the country's broader economic recovery.

The RBZ has pledged to maintain strict monetary controls and continue growing reserves to ensure the longevity and credibility of the local currency in both domestic and international markets.