Zimbabwe says gold-backed currency undervalued against dollar
RBZ governor John Mushayavanhu says Zimbabwe’s ZiG is undervalued and should trade much stronger against the US dollar.
Black News 
Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu says the country’s gold-backed currency, the ZiG, is significantly undervalued and should trade much stronger against the US dollar.
He said the ZiG should trade at about 15 to the US dollar, rather than the current official rate of roughly 25.
Bloomberg reported that Mushayavanhu argued that the central bank has enough reserves to support that level.
“If we wanted to buy back all the local currency in circulation using our reserves, we could do so at an exchange rate of around 15 to the dollar,” he said.
ZiG introduced to stabilise the economy
Authorities launched the ZiG in April 2024 to replace the Zimbabwe dollar, which had weakened sharply under inflation and repeated currency losses.
Government positioned the new currency as a gold- and reserve-backed unit aimed at stabilising prices and reducing dependence on the US dollar.
Official figures show Zimbabwe held about 3.4 metric tons of gold reserves by June 2025.
The RBZ says it has strengthened its financial position since introducing the ZiG.
In its 2026 monetary policy statement, the bank reported that foreign currency reserves increased from $276 million (4.53 billion rands)in April 2024 to $1.2 billion ( 19.72 billion rands) by December 2025.
The central bank also says inflation has dropped to single digits, while exchange-rate stability has improved.
Dollar dominance persists
Despite these gains, most transactions in Zimbabwe still take place in US dollars.
The Confederation of Zimbabwe Industries estimates that more than 90% of transactions are conducted in foreign currency.
In a December report, the group said businesses remain sceptical of the ZiG and view its current stability as artificial and difficult to sustain.
IMF flags continued intervention
The International Monetary Fund has also raised concerns about the central bank’s approach.
It says authorities continue to support the exchange rate by selling foreign currency, which means the rate remains tightly managed.
Mushayavanhu acknowledged that the gap between the ZiG’s official value and its perceived worth reflects low market confidence.
“It’s a function of the confidence of the market in the central bank, and we’re still trying to rebuild that confidence,” he said.
“We had lost it and we’re trying to rebuild it.”
