PIGGY has noted reports from the Reserve Bank of Zimbabwe (RBZ) indicating that the recent rise in year-on-year inflation is temporary and largely a result of price shocks and base effects.
The annual inflation for the Zimbabwe Gold (ZiG) rose from 85,7% in April to 92,1% in May 2025.
Monthly inflation has been steady at less than 1% for the past three months, indicating price-level stability. However, economists have cited that durable stability could only be achieved if policy measures were put in place to guarantee market-driven exchange rates and eliminate distortions in the market.
Piggy maintains the view that inflation remains a big risk to incomes, implying that individuals, households and businesses need to put in place solid value-preservation strategies to mitigate such risks.
Piggy recommends investors to consider parking funds in high-yield money market investments.
High-yield money market investments refer to short-term, low-risk financial instruments that offer higher-than-average returns compared to traditional money market instruments, while still maintaining a relatively high level of liquidity and safety.
These are typically used by investors seeking capital preservation and steady income, but with slightly more aggressive yield targets.
In Zimbabwe, deposit-taking Micro-Finance Institutions and Asset Management Companies offer fixed-term investment accounts ranging from seven to 365 days.
- Awards target married couples
- Awards target married couples
- Zimbabwe needs to rethink economic policies
- Zimbabwe needs to rethink economic policies
Keep Reading
These usually offer higher rates than traditional banks. However, there are minimum investment thresholds that range from around US$1 000 to US$5 000.
Piggy has summarised the major advantages of high-yield money market investments hereunder;
Higher income potential and inflation protection: It should be highlighted that yields are significantly higher than those offered by government or investment-grade corporate bonds. This makes them attractive in low-interest-rate environments or for income-focused investors. For example, a high-yield money market investment might pay 5% per month compared to 10% per annum for a government bond. In addition, because of the higher coupon payments, high-yield investments can outpace inflation more effectively than low-yield instruments.
Portfolio diversification: High-yield money market investment has low correlation with other traditional assets like government bonds and equities. This can help reduce portfolio volatility.
Reinvestment benefits: Regular interest payments (semi-annual, quarterly or monthly) allows for reinvestment and compounding. This enhances total return, especially in rising-rate environments.
Overall, investing in fixed income money market products is generally considered low-risk. Piggy is actively marketing a high yield money market investment. The onboarding process is straight-forward as detailed hereunder;
Submit know your customer (KYC) documentation You will need to fill in an application form and submit a copy of valid ID or passport and Proof of residence (within three months). If investing on behalf of a company or trust, additional documents are required (e.g., CR14, resolution, founding documents).
Fund the investment: Once your account is approved, you will be given a client account number and banking details. Transfer your investment via USD deposit to the manager’s trust account.
Receive investment confirmation: Once funds are received, you will receive an investment certificate or deal note, showing the amount invested, interest rate, and term.
Earn interest: Interest is earned monthly and may be reinvested (compounded) or paid out periodically (monthly/quarterly).
Redeem your investment: At the end of the term (or on notice), you can reinvest by rolling over at new rates or withdraw into your bank account or as cash.
In conclusion, investing in an inflation-hedging instrument in Zimbabwe offers crucial protection against the rapid erosion of purchasing power caused by persistent inflation and currency volatility.
Such instruments, such as USD-denominated money market funds help preserve real value by delivering returns that outpace or adjust with rising prices.
This is especially important in Zimbabwe’s economic environment, where traditional savings and fixed-income products often fail to keep up with inflation, leading to real losses.
By using inflation-hedged investments, individuals, households and businesses can maintain the long-term value of their capital, stabilise income, and protect financial security in uncertain macroeconomic conditions.
- Get more insights and investment tips by joining a PiggyBankAdvisor WhatsApp Group (+263 78 358 4745).
- Matsika is a corporate finance specialist with Switz View Wealth Management. — +263 78 358 4745/ [email protected]
