Zimbabwe News

RBZ Chief says Zimbabwe holds 2.5 tonnes of gold, US$100 million cash reserves

Zimbabwe has 2,5 tonnes of gold and US$300 million in cash reserves, positioning it favourably to introduce a new structured currency, authorities have claimed.

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu on Thursday said of the gold, 1,5 tonnes is held in the central bank’s vaults while one tonne is held offshore. He said:

I can confirm that we have 1.1 tonnes of gold and other precious minerals in the form of diamonds which if converted to gold will be equal to 0.4 tonnes of gold making a total of 1.5 tonnes of what we are holding.

Mushayavanhu said the 2,5 tonnes of gold reserves and other precious minerals are valued at US$175 million at Thursday’s price. He said:

Over and above that, I have also confirmed the cash balances, and nostro balances held by the central bank, and I can confirm that there is US$100 million worth of foreign currency balances in cash.

Zimbabwe holds 2.5 tonnes of gold, US$100 million cash reserves

However, economic commentator Professor Gift Mugano said that the gold is not enough to support the structured currency even if the country is still going to receive forex inflows from exports, diaspora remittances, and credit, among other sources. Said Mugano:

2.6 tons of gold & US$100m (i.e., US$291.8m equivalent) are a drop in the ocean. Here is the simple mathematics:

If we combined 1.1 tons of gold (local) and 1.5 tons of gold (offshore), we have 2.6 tons of gold. If we use the price of gold per ounce of US$2294 as of yesterday, our 2.6 tonnes of gold gives us an estimated value of US$191.8m.

Our total reserves are estimated at US$ 291.8 million if we factor in the additional US$100 which has been announced by the RBZ.

This year, we are anticipating to import goods worth US$9 billion, that is, US$750m per month. Our reserves (2.6 tons + US$100m) = US$291.8m can only cover 11.7 days of the month if we are not exporting anything.


In short, our reserves are not enough to give us at least one month of import cover. Basic economic theory tells us that we must have at least six (6) months of import cover to guarantee currency stability if all things are equal. This is a priori requirement.

In our case, we have approx 1/3 month cover! This is not enough to support the structured currency even if we will still receive forex inflows from exports, diaspora remittances, credit, etc.

Meanwhile, in response to questions from journalists, George Guvamatanga, the Permanent Secretary for Finance, Economic Development, and Investment Promotion, stated that the central bank’s indicated reserves were supplemented by US$300 million held in the Treasury.

The Treasury’s reserves amount to US$300 million in addition to what the central bank has already indicated. Said Guvamatanga (as quoted by The Herald):

The reserves that the Reserve Bank is talking about are central bank reserves; they exclude what His Excellency (the President) has also instructed us to put in reserve. As the fiscal authorities, you cannot run a Government without reserves.

So, over and above the reserves that are in the central bank, the instruction that came to the central bank was also given to Treasury.

And at least if you allow me, Your Excellency, just for today to mention that as Government of Zimbabwe, in various banks in Zimbabwe, not even in the central bank, and in private banks, we have got US$300 million over and above this US$275 million.

We have got more than one month’s import cover which we are holding between the Reserve Bank and the Government of Zimbabwe.

So, the total is more than enough for those who are asking to say, do we have adequate reserves? If you go to the private banks, they will show you that they are holding money on behalf of the Government, which is just over US$300 million, which is again a reserve that we were directed by His Excellency that you have to keep reserve.

Mushayavanhu is anticipated to unveil the long-awaited 2024 Monetary Policy Statement today. This statement will introduce the new structured currency, aimed at addressing inflation and other persistent challenges that have impacted the stability of the local currency.

The eagerly awaited new currency is widely speculated to be gold-backed, signalling a potential shift toward greater economic resilience.

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