Gold and foreign-currency reserves supporting Zimbabwe’s bullion-backed currency, the ZiG (Zimbabwe Gold), hit a record high in June, according to the central bank.
- Zimbabwe’s central bank reported record-high gold and foreign currency reserves, reaching $731 million in June.
- The ZiG currency experienced its largest single-day gain against the U.S. dollar due to increased gold production and reserves.
- The ZiG was introduced to replace the defunct Zimbabwean dollar, addressing past economic instability caused by previous currency collapses.
Gold and foreign-currency reserves supporting Zimbabwe’s bullion-backed currency, the ZiG (Zimbabwe Gold), hit a record high in June, according to the central bank.
The reserves rose to $731 million last month, up from $639 million in May and significantly higher than the $276 million reported in April 2023, when the ZiG was first introduced. The update was shared in a statement released by the central bank on Wednesday.
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This week, Zimbabwe’s gold-backed currency, the ZiG, recorded its biggest single-day gain against the U.S. dollar this year, buoyed by a sharp increase in gold production and stronger foreign currency reserves.
A new chapter after currency failures
Years of economic mismanagement have led to the collapse of five previous attempts to establish a stable currency in Zimbabwe, according to Bloomberg. The ZiG, introduced to replace the defunct Zimbabwean dollar, which had plummeted in value, is the latest effort.
This increase in bullion output has helped triple Zimbabwe’s foreign reserves, offering a much-needed buffer for the country’s fledgling currency and economy.
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The Reserve Bank of Zimbabwe last month reported that it now holds 3.4 tons of gold in its reserves, more than double the 1.5 tons it had in storage when the ZiG currency was first introduced in April last year.
Authorities now hope the gold-backed ZiG will eventually take over from the US dollar, which has served as a parallel currency in the country since 2009.
The International Monetary Fund (IMF) also expressed support for the ZiG, stating that it hopes to see the currency evolve into Zimbabwe’s sole legal tender under a potential staff-monitored program.
