The cash and mineral reserves backing Zimbabwe's new currency have now increased to around $370 million, up from $285 million over the past three months.

This is according to an initial report by the Sunday Mail, citing governor of the central bank, John Mushayavanhu.

The rise in currency and mineral reserves allows for a robust “buffer” for Zimbabwe Gold or ZiG, against external forces, according to the report.

The Reserve Bank of Zimbabwe’s governor stated that the central bank has been building reserves through gold royalties and by converting other minerals like diamonds, lithium, and platinum, Bloomberg reports.

“As a result, the total reserves have progressively increased about 30% from $285 million as at April 5,” to above $370 million as at the end of June, Mushayavanhu said.

The southern African nation introduced the ZiG, which started trading on 8th April, to replace the Zimbabwe Dollar, which has lost as much as 80% of its value against the Dollar this year.

Last week, President Emmerson Mnangagwa announced that the ZiG will become the sole legal tender within the next two years, once it is fully integrated into the market. 

However, Zimbabwean economist Gift Mugano has advised the government to avoid hastily making the ZiG the sole legal tender: “The introduction of a local currency requires basic minimum requirements such as current account surplus, fiscal consolidation (we have to reduce our debt significantly to regions averaging 30% of GDP); a highly productive economy; single-digit inflation and stable exchange rates. In reality, it is very difficult to attain all these conditions at once. However, we must strive to build a productive and competitive economy.”

Furthermore, in September 2022, Zimbabwe implemented regulations requiring mining companies to pay half of their royalties to the government in the form of commodities. 

The aim of this measure was to bolster the country's mineral reserves. Zimbabwe holds the world's third-largest platinum reserves and also mines nickel, chrome, lithium, and coal.