Gold and foreign currency reserves backing Zimbabwe's bullion-linked unit have risen more than twofold since its introduction a year ago, central bank Governor John Mushayavanhu said.

The reserves stood at $629 million at the end of March, compared with $276 million end-April 2024, Mushayavanhu said in a statement at the weekend. They are sufficient to cover the entire ZiG deposits in the banking sector, "pointing to the sustained stability of the ZiG," he said.

The southern African nation holds 2 771 kilograms of gold in reserves valued at $274 million.

The ZiG, short for Zimbabwe Gold, started trading April 8, 2024, replacing the defunct Zimbabwean dollar, which was in freefall. Authorities now want it to supersede the dollar, which has been used as a dual transacting currency since 2009 and is currently used in 70% of commerce.

The ZiG has depreciated 4% against the dollar this year, and lost nearly half its value against the greenback since its launch.

To provide support, the central bank has tightened monetary policy.

Money supply growth has declined from 100% prior to the ZiG's introduction to just under 1% at the end of last month, the governor said. The hawkish stance has "curtailed the pass-through effects" of money supply to the exchange rate and inflation, he said.

"As such, the illegal parallel exchange rate premium has been reduced from over 100% to current levels of below 20%, resulting in the current price and currency stability," said Mushayavanhu.