Zimbabwe’s foreign currency reserves surge by 87%

Philemon Jambaya

Zim Now Editor

The Reserve Bank of Zimbabwe's foreign currency reserves have surged by 87% to reach US$550 million. This substantial increase is a testament to the central bank's effective reserve accumulation strategy.

At its inception in April 2024, the RBZ reported that minerals and foreign currency reserves backing up the Zimbabwean Gold (ZWG) stood at US$285 million, significantly above the thresholds required to defend the local currency from unforeseen uncertainties. The reserves comprise foreign currency and precious metals, primarily gold, sourced from mining royalties, direct currency purchases from the interbank market, and outright gold purchases.

According to RBZ Governor John Mushayavanhu, the total holdings of gold and foreign reserves have increased by 87% since April 2024, reaching approximately US$550 million as of January 2025. This growth has ensured full coverage of the total ZiG deposits in the economy, valued at around ZiG13 billion, thereby supporting the Reserve Bank's currency and exchange rate stability objectives.

The RBZ's reserve accumulation strategy focuses on guaranteeing that the ZiG component of reserve money is fully backed at all times. With the current trends of foreign exchange inflows, including in-kind royalties, the RBZ is optimistic that its reserve accumulation strategy for 2025 will yield significant improvements in foreign reserve holdings.