HARARE – Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya has said the country has a strong local currency safety strategy, with gold and other minerals accounting for 80% of total export earnings.
Mangudya said that contrary to the belief that the Zimbabwean dollar is backed by gold, the country’s local currency, like others around the world, is backed by fiat currency.
“It is not true that our currency is backed by gold. It was the US dollar that was last backed by gold in 1971 and it has changed since then. Our currency is backed by a robust fiat currency. We have over $1 billion of this collateral and $2.4 billion, which is enough to back our currency,” said Mangudya.
Mangudya appeared before the Parliamentary Defense, Home Affairs and Security Portfolio Committee and revealed that gold and other minerals account for 80% of the country’s exports.
“We are pleased to report that gold and minerals together represent 80% of our exports. Last year, $5 billion was earned out of $6 billion in revenue. Therefore, it will be very important to continue filling the gaps in mineral and gold exports,” he said.
The central bank governor also paid tribute to the gold mobilization team deployed by the government for their crucial role in the fight against gold smuggling.