Zimbabwe Gold-backed ZiG Currency Shows Growing Use Amid Investor Doubts

Zimbabwe's government and central bank have made significant strides in stabilizing its economy, with the International Monetary Fund (IMF) commending the disciplined policy measures that have stabilized the Zimbabwean dollar and controlled inflation. The gold-backed Zimbabwe Gold (ZiG) currency, introduced to curb inflation and restore confidence, now reportedly has over 100% reserve coverage, including gold and foreign assets, and its use in transactions has increased from 26% to 43% since its launch. The Reserve Bank of Zimbabwe (RBZ) continues to support key sectors such as agriculture and manufacturing through the Term Lending Refinancing Facility to boost production and back the currency. Despite these efforts and the currency's official stability, skepticism remains among investors and citizens, reflected in a persistent premium in the parallel market and continued reliance on the U.S. dollar. The IMF supports the ZiG's stability but urges Zimbabwe to implement tighter monetary controls, enhance foreign exchange transparency, and address substantial external arrears. Central bank officials emphasize their commitment to maintaining the ZiG as a reliable store of value and stabilizing the economy, while acknowledging the need to overcome the trust deficit caused by Zimbabwe’s historical economic challenges.