Zimbabwe’s new central bank governor, John Mushayavanhu is increasing the country's gold reserves to bolster the ZiG currency, measures that up to now have contributed to stabilising the exchange rate and curbing inflation.

“In the 100 days that I have been in office we have increased those reserves by about 30%. We are now on about $370 million worth of reserves. These have been increased through royalties that we are collecting from mining companies, we are making steady progress. By the time we get to the end of the year we should be talking of no less than three tons of gold,” Mushayavanhu said to Bloomberg.

The ZiG, short for Zimbabwe Gold, is Zimbabwe’s sixth effort to establish a stable local currency in the past 15 years. Launched on 5th April, it is backed by 2.5 tons of gold and $100 million in foreign currency reserves, replacing the Zimbabwean Dollar, which had depreciated by 80% against the US Dollar in 2024.

This rapid decline led locals to abandon the Zimbabwean Dollar in favour of the greenback.

The mineral-rich southern African nation has also discontinued issuing gold coins, introduced in 2022 as a store of value, to further enhance its reserves. Zimbabwe joins several African countries, including Uganda, Nigeria, and Madagascar, that are increasing their gold holdings or considering it to protect their currencies and combat inflation.

Mushayavanhu has pledged not to print any ZiG unless the central bank has adequate reserves to support it as prior currency collapses were associated with an increased money supply when the central bank issued debt to finance government spending, Bloomberg reports.

Furthermore, the governor stated that the ZiG will become the nation’s sole currency once all the necessary conditions are met. President Emmerson Mnangagwa suggested earlier this month that this transition could happen by 2026.

“If we can achieve it in two years, why not? I don’t see any problem with that,” said Mushayavanhu.

The Bankers Association of Zimbabwe, representing 19 lenders, has expressed support for adopting the ZiG as the sole currency ahead of the initial 2030 deadline, provided that inflation remains low and reserves continue to increase.