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Zimbabwe Strengthens Currency Backing with 3.4-Tonne Gold Reserve Amid Push for Economic Stability

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Zimbabwe Strengthens Currency Backing with 3.4-Tonne Gold Reserve Amid Push for Economic Stability

(3 Minutes Read)

Zimbabwe has increased its national gold reserves to 3.4 metric tonnes, a key milestone in its bid to stabilise the newly introduced Zimbabwe Gold (ZiG) currency. The update was shared Thursday by the Presidential Communications Department following President Emmerson Mnangagwa’s visit to the Reserve Bank of Zimbabwe’s (RBZ) secure gold vaults.

Launched in April 2024, the ZiG is part of Zimbabwe’s broader monetary reform strategy aimed at anchoring the currency to hard assets like gold and foreign currency reserves. The RBZ plans to scale reserves to 5 metric tonnes by the end of 2025, supporting fiscal discipline and monetary credibility.

President Mnangagwa, speaking after inspecting the vaults, underscored gold’s central role in shielding the local currency from volatility, calling it a “pillar of monetary stability.”RBZ Governor Dr. John Mushayavanhu confirmed that the current reserve levels are sufficient to fully support the ZiG in circulation. He pointed to the central bank’s strategy of strict liquidity management, government spending restraint, and cautious monetary expansion as key drivers of the recent gains in exchange rate and price stability.

While 3.4 metric tonnes remains modest in global terms—far behind South Africa’s 125 tonnes or the United States’ 8,000+ tonnes—Zimbabwe views its commodity-backed approach as essential for avoiding the hyperinflation that doomed its past currencies.

The International Monetary Fund (IMF) recently praised Zimbabwe’s progress in stabilising inflation and exchange rates but stressed that further structural reforms, enhanced transparency, and stronger institutions are necessary for sustained recovery. The country’s high external debt also continues to weigh on its economic prospects, with re-engagement and debt relief talks ongoing.

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Zimbabwe’s success in reaching its reserve target will hinge on increased domestic gold production and the RBZ’s ability to secure and manage reserves transparently. Gold remains a vital asset, contributing over 20% of the country’s export earnings in 2024, according to ZIMSTAT. The RBZ has pledged to release regular reserve updates, with the next report due in Q3 2025—a move welcomed by economists advocating for financial openness and investor confidence.