GOLD and foreign currency reserves backing the Zimbabwe Gold (ZiG) currency have reached US$750 million — enough for one month import cover — a key milestone towards the country’s medium-term goal of transitioning to a mono-currency regime.
As of August 15, the Reserve Bank of Zimbabwe (RBZ) held 3,5 tonnes (t) of gold valued at US$376 million, which is more than double the 1,5t held in April 2024 when ZiG was introduced.
The remainder of the reserves are in cash holdings.
The cover means Zimbabwe has enough reserves to finance all of its imports for one month.
While still below the international benchmark of three to six months, it marks steady progress towards the central bank’s broader strategy to transition to a mono-currency regime within the next five years.
RBZ Governor Dr John Mushayavanhu told The Sunday Mail that the bank’s reserve accumulation strategy is central to sustaining economic growth and currency stability.
“The Reserve Bank has implemented a reserves accumulation strategy focused on accumulating foreign currency and monetary gold,” he said.
“The objective is to strengthen the country’s reserve assets, thereby enhancing currency stability and supporting the envisaged economic growth trajectory.
“As at August 15, 2025, total reserves backing ZiG amounted to US$750 million, comprising foreign exchange and approximately 3,5 tonnes of gold valued at US$376 million.”
While the current one month import cover is still low by global standards, Dr Mushayavanhu said, the RBZ is targeting the international benchmark of three to six months in the short to medium term.
He said the continued accumulation of reserves will give monetary authorities room to sustainably stabilise the exchange rate during periods of volatility and ensure the country always meets critical import needs, such as fuel and medicines.
Reserves serve as a financial cushion that gives central banks leverage to intervene when markets are unstable and guarantee that a country can pay for essential imports even if foreign currency inflows slow down.
“Based on current trends in reserve accumulation, amounting to about one month of import cover as at August 15, 2025, the Reserve Bank is well on course to achieve the targeted reserve accumulation for the year 2025,” added Dr Mushayavanhu.
“In addition, the Reserve Bank is guided by the regional and international benchmark of between three to six months’ foreign currency reserves import cover.
“In this regard, the Reserve Bank will continue to consistently build up foreign currency reserves with the aim of meeting the desired international benchmark in the short to medium term.”
Monetary authorities believe sufficient reserves are a precondition for a successful transition to a mono-currency system, as they will help sustain ZiG without reliance on the US dollar.
“Ordinarily, foreign reserves, also expressed in months of import cover, are used to manage balance of payment requirements, including the need to meet critical imports.
“In addition, under a market-determined exchange rate regime, foreign reserves play a critical role in smoothening any volatility in the exchange rate by enabling the central bank to intervene in the foreign exchange market,” added the central bank chief.
“As such, all countries operating a mono-currency regime maintain reserves for this purpose.
“In the same way, the Reserve Bank is strategically accumulating foreign currency reserves to support the transition to mono-currency and to ensure sustainability of the local currency.
“In this regard, the build-up of foreign currency reserves is just one of the pre-conditions for successful transition to mono-currency.”
Since its introduction in April 2024, the ZiG currency has shown exceptional resilience.
Between April and August last year, it brought significant stability to the local economy.
Although it faced headwinds in September 2024, the RBZ responded with interventions that narrowed the exchange rate premium from 130 percent to below 40 percent by December, reinforcing confidence in the local unit.
At present, ZiG is trading at around ZiG27:US$1 on the official market, while the parallel market rate ranges between ZiG30 and ZiG34 to the US dollar.
The RBZ began building up reserves following President Mnangagwa’s October 2022 policy directive requiring mining companies extracting precious and high-value minerals to pay part of their royalties in refined mineral products.
This initiative has helped grow Zimbabwe’s mineral-backed reserves, which now serve as a foundation for strengthening ZiG and reducing reliance on the US dollar.
Economist Dr Prosper Chitambara said the reserves accumulation strategy provides the market with confidence.
“I think it shows that we are making good progress, so we need to progressively build on that.”
“So, it means the central bank will be able to intervene quite effectively when they have adequate reserves to stabilise the exchange rate. It is an important development which provides confidence. It also helps provide assurance that there will be stability because the central bank will be able to strategically intervene in the foreign exchange markets; if need be, to stabilise the currency.”
