Reserves Backing ZiG Hit US$533 Million, Says RBZ
Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu said that reserves backing the Zimbabwe Gold (ZiG), including foreign currency and gold, have risen to US$533 million.
In an interview with The Sunday Mail, Mushayavanhu said the reserves, which include 2.67 tonnes of gold valued at US$228 million held in the central bank’s vaults, are more than three times the amount of local currency in circulation.
When the ZiG was launched on April 5 2024, the central bank held around 1.5 tonnes of gold.
Currently, the total ZiG in circulation stands at ZiG183 million, representing approximately 5 per cent of the reserve money.
Mushayavanhu said the growth in reserves has been fueled by a notable increase in gold production, which reached a record 36.48 tonnes in 2024, reflecting a 21 per cent rise compared to 30.10 tonnes in 2023. Said Mushayavanhu:
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 of 30,10 tonnes.
The rise in gold production has been vital for the Reserve Bank to build foreign reserves through royalties and foreign currency earnings from exports, which is critical for backing ZiG.
The boost in gold output has led to higher gold holdings needed to support and cover the ZiG.
Consequently, as of January 9, 2025, the available foreign reserves (reserve cover) held by the Reserve Bank in the form of gold and foreign currency cash were about US$533 million, representing more than three times the actual reserve money.
Since its introduction in April 2024, the ZiG currency has lost significant value and members of the public do not want to keep it but use the notes as small change due to the unavailability of USD denominations less than US$1.
Overall, Zimbabweans have zero trust in the currency and no one want to use it as a store of value, a major function of money.
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