Zimbabwe’s currency hits strongest level against dollar since January on gold gains and reserve build-up

Gold’s recent rally, alongside a steady buildup in foreign-exchange reserves, has provided a lifeline to Zimbabwe’s bullion-backed currency, helping it recoup most of its losses against the U.S. dollar this year.

The ZiG, short for Zimbabwe Gold, traded at 25.98 per dollar on Tuesday, marking its strongest level since January 8, according to Bloomberg’s report.

Since its introduction in April 2024, the ZiG has depreciated only 0.7% against the dollar in 2025, a stark contrast to the wild swings that have historically defined Zimbabwe’s currency market.

The unit is backed by 2.5 tons of gold and $100 million in foreign currency reserves held by the central bank, providing tangible support for its value.

The ZiG represents Zimbabwe’s sixth effort in 15 years to establish a stable local currency, following a string of failed attempts that led to hyperinflation.

At its height, prices were doubling almost daily, eroding household savings and destroying investor confidence.

In 2009, the country effectively abandoned its national currency, adopting a multi-currency system dominated by the U.S. dollar and ushering in a prolonged period of dollarisation.

Despite the ZiG’s introduction, it remains thinly circulated in the southern African nation’s economy.

Most transactions are conducted in U.S. dollars, with companies such as Delta Corp Ltd. reporting that around 80% of sales occur in the foreign currency.