By Jonathan Mbiriyamveka
ZB Financial Holdings on Wednesday presented customers with investment options to mitigate against economic risks at Harare Agricultural Show.
This follows the 2022 mid-term budget and economic review and supplementary budget, Zimbabwe’s economic performance during the first half of 2022 reaffirms the positive growth trajectory as projected in the 2022 national budget.
GDP growth for 2022 was reviewed down to 4.6% from the 5.5 initially projected.
“The downward revision is mainly arising from reduced output from the 2021/22 agricultural season, compounded by continued depreciation of the currency and rising inflation.
“The impact of geo-political developments is also weighing down the growth potential of the economy,” ZBFH said.
Zimbabwe annual inflation worsened by 65.34 percentage points, from 191.56% in June 2022 to 256.9% in July 2022.
Month on month inflations improved by 12 percentage points from 25.5% in July 2022 to 12.3% in August 2022.
The Zimbabwean dollar has generally weakened/lost value over the years. Immediate period January 2022 to date, the local currency depreciated from around Z$108 per US$1 to z$546 per US$1 in August 2022.
The presented highlighted on how to hedge against exchange rate risks, inflations risks and other economic challenges in Zimbabwe.
The ZBFH offered a plethora of long term investment greater than a year such as mutual funds and mixed investments and then short term investments less than year such as treasury investments—money market investment.
Of note on the investment option was the recently introduced gold coins by the RBZ on 25 July 2022.
“Introduction and release of gold coins in smaller units of a tenth ounce, quarter ounce and half ounce for sale to follow mid-November 2022.
“The features, characteristics and the sale terms and conditions shall remain the same as the current trading arrangements of the gold coins in circulation,” ZBFH said.
According to ZBFH, the initiative presented a value preservation investment alternative for economic agents, in the face of hyperinflation.
“By introducing smaller denomination gold coins, the authorities seek to include the rest of the economy, who may have felt excluded, given that not everyone has capacity to purchase the 22-carat gold coins at US1.800 or +/-ZW$900K.
“This can also potentially go a long way towards stabilizing the exchange rate, by reducing pressure on demand for USD as a sore of value. Gold coins actually have intrinsic value, which cannot be said about fiat money,” ZBFH said.
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