MPS Explainer For Businesses and Individuals +video

ZimNow Business Desk

The Reserve Bank of Zimbabwe's Mid-Term Monetary Policy Statement released today, August 7, 2025, offers a clear picture of where the economy stands—and more importantly—where it’s going. For entrepreneurs, corporates, workers, vendors, and investors alike, here’s a practical breakdown of what to expect, where we fit in, and how to position ourselves going forward.

Watch video here: https://youtube.com/shorts/FKoztIZcNb8?feature=shared

🔍 Big Picture: Why This MPS Matters

• Growth is Back: Zimbabwe’s economy is expected to grow 6% in 2025, a sharp rebound from 1.7% in 2024. Agriculture (especially tobacco), mining (notably gold), and tourism are the engines.
• ZiG is Stabilizing: The new currency ZiG is holding its ground. Monthly inflation averaged just 0.6% from February to July, and ZiG now makes up 40% of digital transactions (up from 26%).
• Forex Reserves Have Grown: The RBZ now holds US$730 million in reserves (a 150% jump), giving it more firepower to defend the currency.
• Banks Are Largely Solid: 17 of 19 banks meet core capital requirements. The sector is profitable and liquid, and lending is growing—but mostly in USD.

📌 What It Means for Businesses

1. ZiG Use Is Expanding—So Prepare to Accept It

• Many businesses still resist taking ZiG, fearing volatility. But it’s becoming more embedded in the system.
• Tip: If you run a business, ensure your payment systems accept ZiG (POS, online, mobile) or risk being left behind.

2. Formalisation Is Coming—Ready or Not

• The MPS emphasizes tracking, transparency, and digital trails via the Collateral Registry and Credit Registry.
• Informal traders and micro-enterprises will increasingly need documentation, registration, and compliance to access loans or government facilities.

3. Microfinance Lenders Under Scrutiny

• The RBZ has cracked down on predatory lending, including 25% monthly interest rates and asset seizures without court orders.
• What this means: Expect tighter regulation and possibly lower rates if you borrow from microfinance institutions.

4. Exporters, Take Note

• Mining and agriculture exports are still dominant, with diamonds up 212%, gold up 58%, and over 351 million kgs of tobacco delivered.
• However, prices for most commodities are projected to decline globally in 2025–2026.
• Implication: Exporters should lock in deals, diversify, and manage forex wisely.

👩🏽‍💼 What It Means for Individuals

1. Don’t Ignore ZiG

• Cash use is up, and the RBZ is flooding banks with ZiG notes. It’s also gaining ground in electronic payments.
• Watch for salaries, rent, and fees slowly shifting into partial ZiG use, especially for domestic transactions.

2. Loans Might Be Easier—If You’re Creditworthy

• With increased credit registry usage and expansion of movable collateral (like vehicles and household goods), more people could access loans—but only if your financial record is clean.
• Tip: Pay back loans on time, avoid blacklisting, and consider joining credit cooperatives.

3. Inflation Is Calming—but Caution Still Warranted

• Inflation is expected to drop to under 30% by December, down from 95.8% in July (which was a base effect).
• Translation: Things may feel more predictable, but price hikes could still creep in, especially from external shocks or policy slippage.

⚠️ Risks and Unknowns to Watch

Despite the good news, several red flags remain:

• Low confidence in ZiG among some segments.
• US dollar dominance continues, with 84.7% of bank deposits and 88.4% of loans in USD.
• External shocks (e.g., tariff wars, oil prices, regional instability) could upset the fragile balance.
• ZSE and VFEX are underperforming, reflecting investor caution.

🌱 Opportunities to Plug Into

🧭 Where Do You and I Fit In?

• Entrepreneurs: Start accepting ZiG, digitize your records, and explore RBZ financing windows.
• Workers: Track your salary composition, build a credit profile, and negotiate in real terms.
• Investors: Watch inflation, interest rate tweaks, and reserve levels. Diversify and hedge.
• Policy Advocates & SMEs: Push for better clarity on the dedollarization roadmap, as stakeholders emphasized its urgency.

📣 Final Takeaway

Zimbabwe is in a rare moment of relative macroeconomic calm. The RBZ has taken bold, even surprising, steps to anchor the economy. But for stability to last, it will require consistent policy implementation, better communication, and buy-in from all economic actors.

Don't wait for another policy shock—adapt now. ZiG is not just a currency experiment anymore. It's becoming a central pillar in the new Zimbabwean economy.

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