Zimbabwe gold reserves surge to nearly US$700 million

The reserves backing Zimbabwe's structured currency, Zimbabwe Gold (ZiG), have soared to an impressive US$683 million, more than doubling since the currency's launch in April 2024 and significantly strengthening the currency's sustainability and credibility.

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu revealed the development in an exclusive interview with The Sunday Mail, stating that the reserves - comprising US$352 million in gold, US$258 million in cash and nostro balances, and other assets - now comfortably cover all ZiG currency in circulation and ZiG-denominated bank deposits.

This milestone far exceeds the RBZ's initial target of 100 percent reserve coverage for the local currency.

"In the year following the launch of the structured currency, Zimbabwe Gold, the Reserve Bank has achieved various milestones regarding the sustainability of the currency," said Dr Mushayavanhu.

"Notably, the foreign currency reserves backing ZiG have grown by 145 percent from US$276 million on April 5, 2024, to US$683 million on May 29, 2025."

He attributed the increase to a combination of higher gold prices, strong foreign currency receipts, and prudent monetary management.

Dr Mushayavanhu noted that the recent appreciation in global gold prices has strengthened the value of Zimbabwe's gold holdings, boosting confidence in the ZiG.

"While precious metal valuations are subject to volatility, the current uptrend has enhanced the real value of the Reserve Bank's gold holdings, thereby strengthening the reserve cover for the ZiG currency," he explained.

He also highlighted the narrowing gap between the official and parallel market exchange rates, describing it as a sign of increasing stability and investor confidence.

At the launch of ZiG, the RBZ aimed to maintain full reserve backing for approximately ZiG1.3 billion in circulation - then worth around US$90 million. As of May 29, 2025, reserve money had grown to ZiG4.723 billion (about US$173 million), still fully covered by reserves.

Moreover, the reserves cover all ZiG bank deposits, which stood at ZiG16.99 billion on the same date, demonstrating a reserve coverage ratio well above 100 percent.

"This more than 100 percent reserve coverage reinforces the Reserve Bank's commitment to preserving the stability, integrity and credibility of ZiG as a structured currency," Dr Mushayavanhu affirmed.

The RBZ governor also disclosed that new higher-denomination ZiG banknotes - ZiG10, ZiG20, ZiG50, ZiG100, and ZiG200 - are in the pipeline, with phased roll-out planned depending on demand.

"The process of procuring and producing banknotes can be lengthy, but the Reserve Bank will keep the public updated," he said.

To further entrench the use of ZiG, especially in the informal sector, Dr Mushayavanhu said the government would enforce the use of point-of-sale (POS) machines across all businesses and continue requiring tax payments in the local currency.

"The requirement for quarter provisional income tax payments (QPD) on a 50-50 basis for taxpayers earning at least 50 percent of income in ZiG has increased demand for the local currency," he said.
"This demand has contributed to prevailing exchange rate stability, which is critical for anchoring inflation expectations."

With reserve assets now comfortably exceeding total money supply and deposits, and with continued government efforts to promote ZiG usage, the RBZ remains optimistic about the currency's trajectory.

The central bank says it will continue to monitor global commodity trends to ensure the adequacy of its reserves, reinforcing its broader goal of preserving monetary and financial stability.