ZiG firms as RBZ reserves hit US$533m

Zimbabwe has registered the growth of gold reserves which increased to 2.67 tonnes (valued at US$228m), reports the Zimbabwe Economic Review.

The total reserves, including gold and foreign currency, reached US$533m, over 3x the local currency in circulation.

Key points: ✳️Gold Production Surge:- 2024 Gold Production: 36.48 tonnes (21% increase from 30.10 tonnes in 2023).

-Growth in production driven by higher royalties and export earnings.

✳️ZiG Currency Performance:
-Introduced in April 2024, with ZiG183m in circulation (~5% of reserve money).

-Stabilised local economy from April to August 2024.
The exchange rate is US$1: ZiG24 (official) and US$1: ZiG35-38 (parallel market).

✳️Monetary Policy Updates:
-Plans to introduce higher denomination ZiG notes to simplify transactions.

-New notes aligned with economic activity to ensure stability.
-Aim to increase cash proportion to 5% of deposits, aligning with regional standards.

✳️Reserve Accumulation and Audits:
-Strategy to maintain ZiG backing with gold and foreign reserves.
-Regular audits of gold reserves are underway, with certification pending.

✳️Economic Impact:
-Reserve accumulation supports currency and price stability.
-Measures reduce exchange rate premiums and support de-dollarisation efforts.

✳️Policy Directive:
-President Mnangagwa mandated 50% of mineral royalties to be paid in kind to strengthen reserves.
-Ongoing efforts to build import cover for long-term economic sustainability.

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