Zimbabwe will continue purchasing gold and other precious metals in 2026 as it seeks to strengthen foreign exchange reserves and underpin the stability of its gold-backed national currency, the ZiG, the central bank governor said.
Reserve Bank of Zimbabwe governor John Mushayavanhu said the policy of building reserves through gold accumulation would be extended with the aim of reaching cover equivalent to three to six months of imports, a level widely seen as a benchmark for external stability.
“The Reserve Bank has placed strong emphasis and is committed to ensuring that ZiG is always and at all times backed by adequate foreign currency reserves, mainly in the form of gold,” Mushayavanhu wrote in an opinion piece published in the state-run Sunday Mail.
The ZiG was introduced in April 2024 as Zimbabwe’s latest attempt to stabilise its monetary system after years of currency volatility and high inflation. The unit now accounts for about 40 percent of daily transactions, according to the central bank, and is backed by foreign exchange reserves held largely in gold.
To support the framework, the central bank has been accumulating reserves through direct purchases of gold and deliveries from the mining sector. Since late 2022, mining companies have been required to pay 50 percent of their royalties in the precious metals they produce, rather than in cash.
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Mushayavanhu said Zimbabwe’s foreign exchange reserves stood at $1.1 billion in mid-December 2025, a sharp increase from $276 million recorded in April 2024, when the ZiG was launched. The current level provides cover for about 1.2 months of imports.
Despite the improvement, the reserve position remains well below the authorities’ longer-term target and leaves the economy exposed to external shocks, analysts say.
Zimbabwe relies heavily on gold inflows to build reserves, with the metal accounting for the bulk of mineral exports. High global prices have provided a boost, helping to improve the central bank’s balance sheet and support the ZiG’s backing.
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Gold was trading at around US$4,500 an ounce this month, close to record levels. These price dynamics may have influenced the government’s decision to delay an increase in gold royalties.
Finance Minister Mthuli Ncube has said authorities will not immediately raise the gold royalty rate to 10 percent in 2026 from the current 5 percent, opting instead to wait until prices reach US$5,000 an ounce.
Officials are wary that a premature tax hike could have unintended consequences. Artisanal and small-scale miners, who account for a large share of Zimbabwe’s gold output, have in the past diverted sales to informal channels when taxes or regulations were tightened.
Such leakages would undermine the central bank’s reserve accumulation strategy by reducing official gold deliveries and foreign currency inflows.
The International Monetary Fund has broadly welcomed Zimbabwe’s recent efforts to stabilise its economy but continues to warn that buffers remain thin and confidence fragile.
In its latest assessment, the IMF said foreign exchange reserves were still limited and stressed the need to maintain disciplined monetary and fiscal policies to sustain macroeconomic stabilisation.
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The Fund projects Zimbabwe’s economic growth at about 6 percent in 2025, driven by a strong agricultural season, elevated gold prices and continued inflows from the diaspora. Growth is expected to ease to 4.6 percent in 2026 as conditions normalise.
Against that backdrop, the IMF has urged authorities to press ahead with reforms to the monetary and exchange rate framework, including measures to enhance transparency, strengthen policy credibility and support private sector confidence.
Zimbabwe has cycled through multiple currencies over the past two decades, with repeated episodes of hyperinflation eroding public trust in local money. The authorities say the ZiG, backed by hard assets such as gold, is designed to break that pattern.
Whether the strategy succeeds will depend on the central bank’s ability to keep building reserves, maintain fiscal discipline and ensure consistent policy implementation, economists say.
For now, officials appear determined to stay the course. By extending gold purchases into 2026, the government is betting that sustained reserve accumulation will provide the foundation needed to stabilise the ZiG and anchor expectations in an economy long scarred by monetary turmoil.
