MONTHLY ECONOMIC REVIEW
JULY 2014
Selected Economic Indicators

Stock Market Developments

Monetary Developments

Inflation

National Payments System

Statistical Tables

INSIDE THIS ISSUE

PAGE
SELECTED ECONOMIC INDICATORS

June

July
Month-on-
Month
Change
Z.S.E. Mining Index1
61.32
95.00
54.92%
Z.S.E. Industrial Index1
186.57
188.07
0.8%
Money Supply (Total Bank Deposits) (US$)2
4.32 billion
4.22 billion
-3.07%
Money Supply (M3) Annual Growth2
12.65%
9.58%
-3.07%
Yearly Inflation3
-0.08%
0.31%
0.01%
Nominal Lending Rate (%)
6.00-35.00
6.00-35.00

Sources:
1 Zimbabwe Stock Exchange
2 Reserve Bank of Zimbabwe
3 Zimbabwe National Statistics Agency (ZIMSTAT)


STOCK MARKET DEVELOPMENTS

In July 2014, the Zimbabwe Stock Exchange
(ZSE) registered gains, in line with most
major African markets.

Investor sentiment in the Global markets,
was, however, impacted negatively by
various factors, chief among them, the
increase in geo-political tensions in the
Ukraine and Middle East and the collapse of
Banco Espirito Santo in Portugal. In Africa,
most of the major stock markets recorded
marginal gains with the exception of Nigeria
which was down by 0.9%. Egypt recorded
the highest gains of 8.1% during the month
under review, on the back of new measures
introduced by the Government to cut the
country’s budget deficit.

In line with trends in other major African
stock markets, the ZSE’s industrial index
registered a marginal increase of 0.8%, to
close at 188.07 points during July 2014. On
a year-to-date basis, however, the industrial
index lost 6.89%.
2 3
Source: Zimbabwe Stock Exchange, 2014.
Source: Zimbabwe Stock Exchange, 2014.
2 4
The mining index maintained its upward
trend, gaining 54.92% to close at 95 points
in July 2014, from 61.32 points in June. The
gains were fueled by a rise of 77.1% in the
share price of Bindura Nickel Mine, in July
2014. The mining index, therefore gained
107.5%, on a year to date basis.

The volume of shares traded recovered from
a decline of 24.31%, in June 2014, to an
increase of 80.65% in July. Shares traded in
July 2014 totaled 322.41 million in volume
terms, compared to 178.47 million shares in
June
2014.
Total
turnover,
however,
declined by 11.65%, to close the month
under review at US$25.22 million.

Buttressed by increases in the prices of
heavily
capitalized
counters,
market
capitalization
increased
by
1.76%
to
US$4.96 billion, at the end of July 2014,
from US$4.87 billion at the close of June
2014. On a year to date basis, however, the
ZSE’s market capitalization lost 4.63%.

MONETARY DEVELOPMENTS

Annual broad money growth declined by
3.07 percentage points from 12.65% in June
2014 to 9.58% in July 2014. In absolute
terms,
broad
money
increased
from
US$3 854.92 million in July 2013 to
US$4 224.07 million in July 2014.

On a month-on-month basis, however, broad
money,
declined
by
2.30%
from
US$4 323.57 million in June 2014 to
US$4 224.07. The month-on-month fall in
broad money was reflective of declines in
under 30-days deposits, US$133.98 million;
demand deposits, US$109.03 million; and
savings deposits, US$22.82 million. Partially
offsetting these declines was an increase of
US$166.33 million in over 30-days deposits.

The decline in deposits can be partly
attributed to the transfer of the Exchequer
Account from CBZ Bank to the Reserve
Bank of Zimbabwe. As at end July 2014,
Government deposits at the Central Bank
amounted to US$46.16 million, compared to
Broad Money Structure and Growth
Source: Reserve Bank of Zimbabwe, 2014.
3 5
US$1.18 million in June 2014. The
increase implies a withdrawal of US$44.98
million from the market. Government deposits at the Central Bank are now excluded
from broad money aggregates.

On an annual basis, domestic credit grew by
6.02% from US$3 966.27 million in July
2013 to US$4 205.23 million, in July 2014.
This was on the back of expansions of
US$191.72 million (82.54%) in net credit to
Government and US$32.03 million (0.87%)
in credit to the private sector. Net credit to
Government grew from US$215.53 million
in July 2013 to US$429.98 million in July
2014. The growth in credit to Government
was largely driven by the conversion of
foreign currency accounts (FCA) balances
amounting to about US$203 million into
Treasury Bills (TBs). The FCA balances
were owed by the Central Bank.

Credit to the private sector grew by (0.87%)
from
US$3
671.82
in
July

to
US$3 703.84 in July 2014. This was partially
a result of the persistent liquidity crunch as
well as increased the risk aversion of financial
institutions as they resort to precautionary
lending as a way of mitigating the increase in
non-performing loans.

Non-performing loans refer to those financial
assets from which banks no longer receive
interest and/or installment payments as
scheduled.
The
overall
ratio
of
nonperforming loans to total credit in the banking
sector increased to 18.49% in June 2014, from
14.51% recorded in June 2013.

INFLATION DEVELOPMENTS

Annual Inflation

Annual headline inflation, which has been in
the negative territory since February 2014,
surged to 0.31% in July 2014, from -0.08% in
June 2014. This was largely on account of
increases in non food inflation.
Year-on-Year food inflation increased to
-2.88% in July 2014, from -3.54% in June
2014, largely driven by food products such as
baby cereal, yeast, gravy powder and salt.
Source: Reserve Bank of Zimbabwe, 2014.
Structure of Domestic Credit
4 6
Prices of sugar, jam, honey, chocolate and
confectionery; fruit and vegetables, however,
recorded a decline.
Annual non-food inflation accelerated to
1.91% in July 2014, from 1.67% in June
2014, mainly driven by increases in housing
rentals, alcoholic beverages and tobacco, as
well as transport, health and educational
services.
Month-on-Month Inflation
Month-on-month inflation stood at 0.01% in
July 2014, up from -0.03% in June, driven by
increases in prices of non food items.
Monthly food prices decelerated to -0.46% in
July 2014, from -0.12% in June, on the back
of decreases in fruits, vegetables, bread and
cereals, coffee, tea and cocoa, oil and fats,
and meat prices.
The decline in monthly food inflation was,
however, partially offset by increases in
prices of milk, cheese and eggs; fish and sea
food; and mineral waters, soft drinks, fruit
and vegetable juices.
Monthly non-food inflation surged to 0.24%
in July 2014, from -0.02% in June 2014, on
account of increases in education, restaurant
and hotels, and health services; housing,
water, electricity, gas and other fuels;
clothing and footwear prices.


Source: ZIMSTATS, 2014.

NATIONAL
PAYMENTS
SYSTEM
DEVELOPMENTS
Zimbabwe Electronic Transfer Settlement
System (ZETSS)
The value of transactions processed through
the RTGS system in July 2014 increased by
7% to US$3.9 billion, from US$3.7 billion in
June 2014. In volume terms, transactions
registered an increase of 3% from 193 582 to
199 587 during the same period.
Card Based Transactions
The total value of card based transactions
increased by 8.74% to US$392.81 million in
July 2014, from US$361.25 million in June
2014.
Mobile and Internet Based Transactions
The value of mobile and internet based
transactions increased by 6.6%, from
US$388.46 million, in June 2014 to
US$414.09 million in July 2014.
Cheque Transactions
The value of cheque transactions declined to
US$11.72 million in July 2014, from
US$12.42 million in June 2014.


Reserve Bank of Zimbabwe
August 2014

Source: Reserve Bank of Zimbabwe, 2014.

NOTES

STATISTICAL TABLES
CONTENTS

Table


. Monetary Statistics


1.1 Monetary Aggregates

1.2 Broad Money Survey

1.3 Analysis of Monthly Changes in Money Supply

1.4 Analysis of Yearly Changes in Money Supply

2. Sectoral Analysis of Bank Loans and Advances and Deposits


2.1 Sectoral Analysis of Commercial Banks Loans and Advances 15

2.2 Sectoral Analysis of Merchant Banks Loans and Advances

2.3 Sectoral Analysis of Merchant Acceptances

2.4 Sectoral Analysis of Commercial Banks Deposits

2.5 Sectoral Analysis of Merchant Banks Deposits

3. External Statistics


3.1 Total External Debt Outstanding by Debtor

4. Interest Rates


4.1 Lending Rates

4.2 Banks Deposit Rates

5. Inflation


5.1 Monthly Inflation

5.2 Yearly Inflation

6. Exchange Rates

STATISTICAL TABLES
CONTENTS

Table


. Commercial Banks


7.1 Assets

7.2 Liabilities

8. Accepting Houses


8.1 Assets

8.2 Liabilities

9. Building Societies


9.1 Assets

9.2 Liabilities

10. Zimbabwe Stock Exchange Statistics

11. Savings with Financial Institutions

12. Analysis of Liquid Assets of Monetary Banks

13. ZETSS, Cheques and Cards Activity


13.1 Values of Transactions

13.2 Volumes of Transactions

1. These are large corporation with business operations covering across a number of sectors.

TABLE 2.3 :SECTORAL ANALYSIS OF MERCHANT BANKS ACCEPTANCES


US$ Thousands


AGRICULTURE
DISTRIBUTION
FINANCIAL
FINANCIAL
MANUFACTURING
MINING
SERVICES
TRANSPORT
INDIVIDUALS
CONGLOMERATES
TOTAL
END OF


INVESTMENT ORGANISATIONS

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH


TABLE 2.5 : SECTORAL ANALYSIS OF MERCHANT BANKS DEPOSITS


US$ Thousands


AGRICULTURE
COMMUNICATIONS
CONSTRUCTION
DISTRIBUTION
FINANCIAL
&
FINANCIAL MANUFACTURING
MINING
SERVICES
TRANSPORT
INDIVIDUALS
CONGLOMERATES
TOTAL
END OF


INVESTMENTS
ORGANISATIONS

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE


TABLE 3.1: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR (INCLUDING ALL


End Period

(US$ millions)


Long-Term External Debt


Government

Bilateral Creditors


Multilateral Creditors

Private Creditors

Public Enterprises

1,092
1,198
1,356
Bilateral Creditors

Multilateral Creditors

Private Creditors

Monetary Authorities

Multilateral Creditors - IMF

Private

1,002
Short-Term External Debt

1,198
1,382
1,289

1,564
Supplier's Credits

Reserve Bank

Private

Total External Debt


Gross Domestic Product

External Debt / GDP


SOURCE: Ministry of
Finance and Reserve Bank

TABLE 4.1 LENDING RATES (percent per annum)1

Commercial Banks
Merchant Banks


Weighted Average Lending
Rates3

Weighted Average Lending
Rates3
End Period
Nominal
Lending
Rates2
Individuals
Corporate
Nominal
Lending
Rates2
Individuals
Corporate

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

June

July


Notes


1. Table revised, to separate weighted lending rates for individuals and corporate bodies.
2. Nominal Lending Rates depict the range of rates quoted by banks.
3. Lending rates exclude rates on staff loans.

TABLE 4.2 : BANKS DEPOSIT RATES (percent per annum)1


COMMERCIAL BANKS
ACCEPTING HOUSES


END OF
SAVINGS
3 MONTHS
3 MONTHS

JANUARY
0.15-8.00
4.00-20.00
6.00-17.00
FEBRUARY
0.15-8.00
4.00-20.00
6.00-17.00
MARCH
0.15-8.00
4.00-20.00
8.00-12.00
APRIL
0.15-8.00
4.00-20.00
8.00-12.00
MAY
0.15-8.00
4.00-20.00
6.00-17.00
JUNE
0.15-8.00
4.00-20.00
6.00-17.00
JULY
0.15-8.00
3.00-20.00
6.00-17.00
AUGUST
0.15-8.00
3.00-20.00
6.00-17.00
SEPTEMBER
0.15-8.00
3.00-20.00
11.00-12.00
OCTOBER
0.15--8.00
3.00-20.00
11.00-12.00
NOVEMBER
0.15--8.00
3.00-20.00
11.00-12.00
DECEMBER
0.15--8.00
3.00-20.00
11.00-12.00

JANUARY
0.15--8.00
3.00-20.00
11.00-12.00
FEBRUARY
0.15--8.00
3.00-20.00
11.00-12.00
MARCH
0.15--8.00
3.00-20.00
11.00-12.00
APRIL
0.15--8.00
3.00-20.00
11.00-12.00
MAY
0.15-8.00
3.00-20.00
11.00-12.00
JUNE
0.15-8.00
3.00-20.00
11.00-12.00
JULY
0.15-8.00
3.00-20.00
11.00-12.00


1.
The range of rates quoted by banks during the period.
2.
Three (3) months deposit rates revised to exclude rates on inactive or dormant
accounts.

1. Source: ZIMSTATS. To reflect changing expenditure
patterns, ZIMSTAT introduced a revised CPI basket and
rebased CPI figures to December 2012=100.

1. Source: ZIMSTATS. To reflect changing expenditure
patterns, ZIMSTAT introduced a revised CPI basket and
rebased CPI figures to December 2012=100.

TABLE 6 : SELECTED INTERNATIONAL EXCHANGE RATES


SA
BW
JAPANESE
EUROPEAN
POUND
END OF
RAND/1
PULA/1
YEN/1
CURRENCY/2
STERLING/2

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY


1. Foreign currency per US Dollar.


2. US Dollar per unit of foreign currency.

TABLE 7.1: COMMERCIAL BANKS - ASSETS


US$ Millions


Liquid Assets


Securities


Loans & Contingent
Other
Non
Financial
Total
End of
Notes


Total
Other Balances Advances
Assets
Assets
Assets
Assets

&
Balances
Balances
Balances


Liquid
with RBZ


Coin
with
with Other
at
Trade
Treasury Agric PEs
Assets


at Banks
RBZ
Banks
Foreign
Banks
Bills
Bills

May

Jun

Jul

Aug.

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

Jul


TABLE 7.2: COMMERCIAL BANKS - LIABILITIES
US$ Millions


Deposits


Amounts Owing to
Capital
Contingent
Other
Total
Of which


and
Liabilities Liabilities Liabilities Liabilities
to the
End of
Demand
Savings and
Short-term
Long-term
Total
Foreign
Liabilities
RBZ
Other Banks Reserves


Public


Deposits

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

Jul


TABLE 8.1 : ACCEPTING HOUSES - ASSETS
US$ Millions


Liquid Assets


Loans & Contingent
Other
Non Financial
Total

End of
Notes


Total
Other
Balances Advances
Assets
Assets
Assets
Assets


&
Balances Balances Balances


Liquid
with RBZ


Coin
with
with Other
at
Trade
Treasury
Assets


at Banks
RBZ
Banks
Foreign
Banks
Bills
Bills

Jul


Aug


Sep


Oct


Nov


Dec


Jan


Feb


Mar


Apr


May


Jun


Jul


TABLE 8.2 : ACCEPTING HOUSES - LIABILITIES
US$ Millions


Of which


Deposits


Amounts Owing to
Capital
Contingent
Other
Total
Liabilities to the


and
Liabilities
Liabilities
Liabilities
Public
End of Demand Savings and
Short-term
Long-term
Total
Foreign
Liabilities
RBZ
Other
Banks
Reserves


Deposits

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

Jul


TABLE 9.1 : BUILDING SOCIETIES - ASSETS
US$ Millions


Liquid Assets


Notes
Balances
Trade
Treasury
Total
Mortgage
Other
Other
Non Financial
Total
End of
&
with Other
Bills
Bills
Liquid
Advances
Advances
Assets
Assets
Assets

Coin
Banks


Assets


at Banks

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

Jul


TABLE 9.2 : BUILDING SOCIETIES - LIABILITIES
US$ Millions


Of which

Deposits
Capital
Other
Total
Liabilities to the


and
Liabilities
Liabilities
Public
End of
Savings and
Short-term
Long-term
Total
Reserves


Deposits

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

July


Table 10: ZIMBABWE STOCK MARKET STATISTICS


Indices
US$ Millions

Industrial
Mining
Market Capitalisation

Oct
154.47
93.66
4,033,76
Nov
150.16
68.74
3,890.9
Dec
152.40
65.12
3,963.50

Jan
179.34
84.07
4,700.33
Feb
182.3
72.01
4,748.24
Mar
183.88
66.21
4,726.34
Apr
189.66
71.98
4,894.68
May
212.72
73.99
5,471.22
Jun
211.19
73.29
5,436.57
Jul
232.87
66.77
5,9136.78
Aug
181.67
48.73
4,682.27
Sep
200.05
49.90
5,157.20
Oct
209.74
52.68
5,407.42
Nov
213.04
47.02
5,482.03
Dec
202.12
45.79
5,203.13

Jan
189.25
35.40
4,882.11
Feb
189.45
39.24
4,906.94
Mar
176.32
29.51
4,560.29
Apr
172.91
29.64
4,473.51
May
174.89
35.45
4,485.11
Jun
186.57
61.32
4,873.40
July
188.07
95.00
4,959.21


Source: Zimbabwe Stock Exchange (ZSE)

TABLE 11 : SAVINGS /1 WITH FINANCIAL INSTITUTIONS


US$ Millions


Commercial
Merchant

Building

End of
Banks
Banks
Other/2
Societies
TOTAL

January

February

March

April

May

June

July

August

September

October

November

December


January

February

March

April

May

June

July


1/ Comprises all deposits other than demand deposits.
2/ Includes People’s Own Savings Bank (POSB).

TABLE 12 : ANALYSIS OF LIQUID ASSETS OF MONETARY BANKS


US$ Millions


Commercial Banks
Accepting Houses


Liquid
Prescribed
Excess
Liquid
Prescribed
Excess

assets
liquid
liquid
assets
liquid
Liquid
End of
held
assets/1
assets
held
assets/1
assets

January

February

March

April

May

June

July

August

September

October

November

December


January

February

March

April

May

June

July


1/ With effect from May 2012, the prescribed liquid asset ratio was reviewed to 30% of liabilities to the public.

TABLE 13.1 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY
Values of Transactions (US$ in millions)
MONTH
ZETSS
CHEQUE
POS
ATM
MOBILE
INTERNET

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Annual Total


Jan

Feb

Mar

Apr

May

June

July


TABLE 13.2 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY
Volumes of Transactions (in thousands)
MONTH
ZETSS
CHEQUE
POS
ATM
MOBILE
INTERNET

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Annual Total


Jan

Feb

Mar

Apr

May

Jun

July

37.68