In a bold bid to regain public and investor confidence, Zimbabwe is ramping up its gold reserves as it backs its new Zimbabwe Gold (ZiG) currency with hard assets in a shift designed to end decades of financial instability.

The country’s gold holdings have reached 3.4 metric tonnes, following an inspection by President Emmerson Mnangagwa at the Reserve Bank of Zimbabwe (RBZ)’s secure vaults. Authorities aim to boost this to 5 metric tonnes by the end of 2025, signaling an aggressive strategy to reinforce the credibility of the ZiG, which was introduced in April 2024.

The RBZ’s new approach ties the local currency to tangible assets, primarily gold and foreign exchange reserves, to curb excessive money printing and hyperinflation that have plagued Zimbabwe’s economy since the early 2000s.

RBZ Governor Dr. John Mushayavanhu assured that current reserves are already sufficient to back the existing supply of ZiG fully, thanks to tight monetary policies and prudent government spending. These measures have helped bring relative price and exchange rate stability, a marked departure from the volatility of past years.

Although Zimbabwe’s gold holdings pale in comparison to economic heavyweights like South Africa (125 metric tonnes), the U.S. (over 8,000 tonnes), and Germany (more than 3,300 tonnes), the gold-backed currency model offers a unique safeguard: limited money supply growth, which curbs inflation and protects purchasing power.

The move has drawn cautious praise from the International Monetary Fund (IMF), which acknowledged Zimbabwe’s strides in fiscal discipline and inflation control. Still, the IMF emphasized the need for sustained reforms, including debt transparency, stronger institutions, and improved governance for long-term success.

Analysts also highlight that while building gold reserves is crucial, Zimbabwe’s true test lies in attracting foreign investment, improving export competitiveness, and ensuring policy consistency.

As the ZiG enters its second year, the gold strategy may be Zimbabwe’s best hope yet at restoring confidence in its monetary system and breaking the cycle of boom-and-bust economics that has stifled its growth for over two decades.