Rumbidzayi Zinyuke
ZIMBABWE has 2,5 tonnes of gold and US$300 million in cash reserves, placing it in good stead to introduce a new structured currency.
Of the gold, 1,5 tonnes is held in the Reserve Bank of Zimbabwe (RBZ) vaults while one tonne is held offshore.
The revelation comes as the new RBZ Governor Dr John Mushayavanhu is expected to present the much-awaited 2024 Monetary Policy Statement today, through which the new structured currency would be introduced to deal with inflation and other challenges that have affected the stability of the local currency.
The new currency is widely expected to be gold-backed.
In a first of its kind to mark a change in leadership at the RBZ, President Mnangagwa yesterday toured the RBZ where he was shown the 1,1 tonnes of gold held by the RBZ in its vaults.
Zimbabwe also has other precious minerals such as diamonds, which when converted to gold, are equal to 0,4 tonnes, hence the combined 2,5 tonnes of gold the RBZ is alluding to.
The President was taken on the tour of the RBZ vaults by Dr Mushayavanhu, who was in the company of Dr John Mangudya, the outgoing central bank chief.
Said Dr Mushayavanhu: “We also have other precious minerals in the form of diamonds and so forth which, if converted to gold, will be equal to 0,4 tonnes of gold.
“That makes the total of what we are holding in the vaults, converted to gold, to 1,5 tonnes.”
The gold and cash holdings augur well for the country ahead of the introduction of the new structured currency, whose finer details are expected today.
Dr Mushayavanhu said the 2,5 tonnes of gold reserves and other precious minerals are valued at US$175 million at yesterday’s price.
“Over and above that, I have also confirmed the cash balances, nostro balances held by the central bank, and I can confirm that there is US$100 million worth of foreign currency balances in cash,” he said.
President Mnangagwa said the purpose of his tour was to physically see the gold reserves held by the bank, as the new governor takes over the reins from Dr Mangudya.
In the past, the country did not keep gold reserves as it sold all of the yellow metal and other precious minerals.
The President said previously, the outgoing governor would just leave while his successor would simply take over without a formal handover takeover process.
“This time around, I decided I wanted to physically see these assets because, in the past, we did not have any reserves or commodities reserved here.
“We sold all our gold, all our precious minerals, I then gave instructions to the outgoing governor two years ago that we needed 10 percent of our minerals kept in solid commodities.
“If it is platinum, we will take 10 percent of platinum and that 10 percent is converted into gold, and other minerals again, which we cannot keep physically; we will again convert that to gold.”
President Mnangagwa said Dr Mangudya gave him details of all the assets held by the central bank.
“So, I felt that I must physically inspect what he told me verbally as he hands over to the new governor so that when I inspect with the new Governor, the figures must tally at the end.
“I am satisfied that the outgoing governor respected my instructions, for the first time in Zimbabwe there is solid gold in the vaults,” said President Mnangagwa.
The President said a few months ago he travelled outside Zimbabwe to inspect the country’s gold reserves held offshore and the findings were satisfactory.
Responding to questions from journalists, Permanent Secretary for Finance, Economic Development and Investment Promotion, Mr George Guvamatanga, said in addition to the reserves that the central bank indicated, Treasury had US$300 million in reserves.
“The reserves that the Reserve Bank is talking about are central bank reserves; they exclude what His Excellency (the President) has also instructed us to put in reserve. As the fiscal
authorities you cannot run a Government without reserves.
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“So, over and above the reserves that are in the central bank, the instruction that came to the central bank was also given to Treasury.
“And at least if you allow me, Your Excellency, just for today to mention that as Government of Zimbabwe, in various banks in Zimbabwe, not even in the central bank, and in private banks, we have got US$300 million over and above this US$275 million,” he said.
Mr Guvamatanga said Government reserves of US$300 million can be verified with all the banks.
“So there are Government reserves, there are central bank reserves and if we add everything, we have got more than adequate cover.
“We have got more than one month’s import cover which we are holding between the Reserve Bank and the Government of Zimbabwe.
“So, the total is more than enough for those who are asking to say, do we have adequate reserves? If you go to the private banks, they will show you that they are holding money on behalf of the Government, which is just over US$300 million, which is again a reserve that we were directed by His Excellency that you have to keep reserves,” said Mr Guvamatanga.
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