Harare — Economists and financial analysts have urged Zimbabwean authorities to maintain a tight monetary policy to safeguard the stability of the Zimbabwe Gold (ZiG) currency, warning that strong reserve backing alone will not guarantee long-term credibility, according to News Day.
The ZiG, introduced in April 2024, is anchored on gold, precious minerals, and foreign currency reserves. Government officials say its position has been strengthened by a record gold output of 46.7 tonnes in 2025, a milestone that has significantly expanded reserve buffers at the central bank.
However, experts caution that without strict monetary discipline, the gains from increased gold production could quickly be eroded.
Zimbabwe Economics Society vice-president Misheck Ugaro said the future of the ZiG hinges on consistent policy restraint by monetary authorities.
“Higher gold production can certainly reinforce the ZiG, but only if the central bank maintains a tight monetary policy and continues to accumulate reserves,” Ugaro said. “That discipline is central to building a durable and credible domestic currency.”
He added that credibility would be earned over time through predictable policy actions rather than headline production figures.
University of Zimbabwe Business School director Albert Makochekanwa shared similar views, noting that currency stability is a prerequisite for broader economic recovery.
“A stable and strong local currency creates the foundation for renewed confidence and growth across the economy,” Makochekanwa said. “Efforts by the central bank to maintain a tight monetary stance will enhance the competitiveness and acceptability of the ZiG.”
Analysts broadly agree that record gold production provides an important cushion for the currency, giving authorities greater room to build reserves and defend stability. Yet they emphasise that reserves should be treated as a supporting pillar, not a substitute for disciplined monetary management.
According to government figures, foreign currency reserves rose to US$900 million by the end of September 2025, up from US$700 million in June, reflecting improved inflows and tighter controls.
Authorities have also indicated that the planned introduction of new ZiG notes will further strengthen public confidence, complementing existing reserve backing and policy measures.
Still, economists warn that confidence in the ZiG will ultimately depend on sustained restraint in money supply growth, transparency in reserve management, and consistency in policy implementation—lessons drawn from Zimbabwe’s long history of currency instability.
As the ZiG enters a critical consolidation phase, analysts say the coming months will test whether record gold output can be converted into lasting monetary stability through disciplined governance.