Vol. 25 No. 41


Week Ending
13th October 2023
Weekly Economic
Highlights
TABLE OF CONTENTS


BEYOND INFLATION NUMBERS - THE CASE OF

1.
OVERVIEW

This report provides an analysis of the developments in the money and capital markets for the
week ending 13th October 2023. The report also covers developments in international commodity
prices, during the same period.


The Zimbabwe Stock Exchange (ZSE) traded in a positive trajectory for the third consecutive
week, while the Victoria Falls Stock Exchange (VFEX) continued to exhibit bearish sentiments.
The National Payment System (NPS) processed transactions valued at ZW$5.10 trillion, down
by 4.57% from ZW$5.34 trillion in the week ending 6th October 2023.

On the money market, minimum and maximum deposit rates for foreign currency deposits
remained largely unchanged, during the week under review. In the same week, commodity prices
for gold, platinum, copper, nickel and brent crude oil increased, while those for palladium and
lithium decreased.


2.
INTEREST RATES

Local Currency (ZW$) Deposit Rates

During the week ending 13th October 2023, minimum and maximum ZW$ deposit rates for
savings deposits, deposits of 6-month and 12-month tenors remained largely unchanged.
However, maximum deposit rates for deposits of 1-month tenor decreased, while those for
deposits of 3-month tenor increased, during the week under review.

Table 1: Average Deposit Rates (per annum)
Date
Savings deposits (%)

1- Month deposit
rates (%)

3- Month deposit
rates (%)

6- Month deposit
rates (%)

12- Month deposit
rates (%)

Minimum
(%)
Maximum
(%)
Minimum
(%)
Maximum
(%)
Minimum
(%)
Maximum
(%)
Minimum
(%)
Maximum
(%)
Minimum
(%)
Maximum
(%)
15-Sep-23

22-Sep-23


29-Sep-23

6-Oct-23
34.29
35.60
59.00


13-Oct-23

Source: Reserve Bank of Zimbabwe, 2023

Local Currency Lending Rates

The minimum ZW$ lending rates for both corporate and individual clients decreased, while
maximum lending rates for both categories of clients registered marginal increases, during the
reporting week, as shown in Table 2.


Table 2: Lending Rates (per annum)
Date
Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)

Individual Clients
Corporate Clients

15-Sep-23

22-Sep-23

29-Sep-23

6-Oct-23

13-Oct

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

Minimum and maximum FCA deposit rates for deposits of all classes remained largely
unchanged, during the week under review, as shown in Table 3.

Table 3: Average Foreign Currency Deposit Rates (per annum)

Date
Savings deposits (%)
1- Month deposit
rates (%)

3- Month deposit
rates (%)

6-Month deposit
rates (%)

12- Month deposit
rates (%)

Minimum
(%)
Maximum
(%)
Minimum
(%)
Maximum
(%)
Minimum
(%)
Maximum
(%)
Minimum
(%)
Maximum
(%)
Minimum
(%)
Maximum
(%)
15-Sep-23

22-Sep-23

29-Sep-23


6-Oct-23

13-Oct-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Lending Rates

Minimum foreign currency lending rates for individual clients increased, while those for
corporate clients decreased marginally, during the week under analysis. Maximum foreign
currency lending rates for individual clients registered a marginal decline, while those for
corporate clients increased, during the reporting week.

Table 4: Lending Rates (per annum)

Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)

Individual Clients
Corporate Clients

15-Sep-23

22-Sep-23

29-Sep-23

6-Oct-23

13-Oct-23

Source: Reserve Bank of Zimbabwe, 2023
3.
CLEARING AND SETTLEMENT ACTIVITY

The National Payment Systems processed transactions valued at ZW$5.10 trillion, during the
week ending 13th October 2023. This represented a decrease of 4.57% from ZW$5.34 trillion in
the previous week. Real Time Gross Settlement (RTGS) transactions declined by 0.83% to ZW$
4.251 trillion, during the reporting week, from ZW$4. 287 trillion in the previous week. The
distribution of NPS transactions, in value terms, was as follows: RTGS, 83.38%; Mobile, 7.46%;
POS, 6.63% and ATM, 3.53%, as shown in Figure 1.

Figure 1: Composition of NPS Transactions in Value Terms

Source: Reserve Bank of Zimbabwe, 2023
RTGS
83,38%
POS
5,63%
ATM
3,53%
MOBILE
7,46%
RTGS
POS
ATM
MOBILE

The volume of transactions processed through the NPS decreased by 3.03% to close at 12.37
million, weighed down by decreases in RTGS, POS and ATM transactions volumes. The NPS
transaction volumes were distributed as follows: Mobile, 81.92%; POS, 15.56%; ATM, 1.08%;
and RTGS, 1.44%, as shown in Figure 2.

Figure 2: Composition of NPS Transactions in Volume Terms

Source: Reserve Bank of Zimbabwe, 2023

Table 5: National Payment Systems Activity
PAYMENT
STREAM
WEEK ENDING
06 OCTOBER 2023
WEEK ENDING
13 OCTOBER 2023
% CHANGE
FROM LAST
WEEK
PROPORTION

VALUES IN ZW$ Millions

RTGS

POS

ATM

MOBILE

TOTAL


VOLUMES
RTGS

POS

ATM

MOBILE

TOTAL

Source: Reserve Bank of Zimbabwe, 2023


RTGS; 1,44%
POS; 15,56%
ATM; 1,08%
MOBILE; 81,92%
RTGS
POS
ATM
MOBILE

4.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS


During the week of analysis, international average price dynamics for the selected commodities
were mixed, as shown in Table 6.

Table 6: Metal and Crude Oil Prices for the week ending 13th October 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil
Lithium

US$/ounce
US$/ounce
US$/ounce
US$/tonne
US$/tonne
US$/barrel US$/tonne

Weekly Average
(02 - 06 Oct)

9-Oct

10-Oct

11-Oct

12-Oct

13-Oct

Weekly Average
(09 - 13 Oct)

Weekly Change

Source: BBC, KITCO and Bloomberg 2023

Precious Metals

The prices of gold and platinum gained by 2.55% and 0.86%, respectively, while those of
palladium and lithium fell by 2.43% and 1.14%, during the week under review. The gains in gold
and platinum prices were attributed to their safe-haven status, amid the geopolitical tensions and
economic turmoil in the Middle East region. Palladium prices declined on account of softening
industrial demand, and similarly, lithium prices slipped, underpinned by a slowdown in China's
demand for fully electric cars. Figure 3 shows the trends in commodity prices for gold, platinum,
palladium, and lithium for the week ending 13th October 2023.

Figure 3: Weekly Precious Metals Price Developments (07 Oct. 2023 - 13 Oct. 2023)

Source: Kitco,2023

Source: Kitco,2023

Source: Kitco,2023

Source: London Metal Exchange,2023


Base Metals and Brent Crude Oil
During the week ending 13th October 2023, copper, nickel and Brent crude oil prices rose by
0.72%, 0.38% and 0.14%, respectively. Base metal prices rose amid high demand from China,
with investors focussing on upcoming crucial U.S. inflation data. Oil prices rose as investors
remained on edge about escalating geopolitical tensions in the Middle East. Figure 4 shows daily
commodity price developments for copper, nickel and Brent crude oil for the week ending 13th
October 2023.

US$/ounce
Gold
Gold
Linear (Gold)

US$/ounce
Platinum
Platinum
Linear (Platinum)

US$/ounce
Palladium
Palladium
Linear (Palladium)

US$/tonne
Lithium Hydroxide
Lithium Hydroxide
Linear (Lithium Hydroxide)

Figure 4: Daily Commodity Price Developments for Copper, Nickel and Brent Crude Oil

Source: London Metal Exchange,2023

Source: London Metal Exchange,2023

Source: BBC,2023


7-Oct
8-Oct
9-Oct
10-Oct
11-Oct
12-Oct
13-Oct
US$/tonne
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
9-Oct
10-Oct
11-Oct
12-Oct
13-Oct
Copper 8014,00 7945,50 7936,00 7946,00 8118,00 8017,00 8186,00 8053,50 7996,50 7994,50
Copper
Copper
Linear (Copper)

7-Oct
8-Oct
9-Oct
10-Oct
11-Oct
12-Oct
13-Oct
US$/tonne
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
9-Oct
10-Oct
11-Oct
12-Oct
13-Oct
Nickel 18800,00 18635,00 18695,00 18445,00 18585,00 18815,00 18635,00 18550,00 18750,00 18765,00
Nickel
Nickel
Linear (Nickel)

7-Oct
8-Oct
9-Oct
10-Oct
11-Oct
12-Oct
13-Oct
US$/barrel
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
9-Oct
10-Oct
11-Oct
12-Oct
13-Oct
Brent crude oil

Brent crude oil
Brent crude oil
Linear (Brent crude oil)

Exchange Rate Developments
Interbank Market
The Zimbabwe dollar (ZW$) depreciated by 0.74% on the interbank market, from an average of
ZW$5,577.17 per US$1 in the previous week to ZW$5,618.18 per US$1, during the week under
review, as shown in Table 2.

Table 2: Selected Exchange Rates (ZW$ per unit of foreign currency)

USD
ZAR
GBP
BWP
EURO
Weekly Average
(02 - 06 Oct)

09-Oct

10-Oct

11-Oct

12-Oct

13-Oct

Weekly Average
(9 - 13 Oct)

Appr (-)/Depr (+) (%) of the
ZWL

Source: Reserve Bank of Zimbabwe, 2023


5. EQUITY MARKETS

During the week ending 13th October 2023, trading on the Zimbabwe Stock Exchange (ZSE)
remained positive for the third consecutive week, while bearish sentiments persisted on the
Victoria Falls Stock Exchange (VFEX). As such, the ZSE All Share index rose by 5.57% to close
the reporting week at 138 620.74 points. The VFEX All Share index declined by 3.53% and
closed at 71.41 points by the end of the same week.

Zimbabwe Stock Exchange (ZSE) Developments
The Top 10, Top 15, Medium and Small Cap indices added 3.79%, 3.08%, 9.60 and 33.0% to
close at 61 119.06 points, 82 773.82 points, 566 226.72 points and 3 774 092.29 points,
respectively, during the week under review.

Figure 3 shows developments on the ZSE’s All Share, Top 10 and Mining indices from 14th
October 2022 to 13th October 2023.

Figure 3: ZSE All Share, Top 10 and Mining Indices

Source: Zimbabwe Stock Exchange, 2023

The increase in the mainstream index emanated from share price gains in CBZ Holdings Limited
(51.16%), Truworths Limited (33.75%), NMBZ Holdings Limited (30.90%), Nampak
Zimbabwe Limited (25.90%) and First Mutual Properties Limited (11.25%).

Partially offsetting the abovementioned increases were declines in the share prices of FBC
Holdings Limited (15.70%), TSL Limited (9.93%), Ariston Holdings Limited (7.39%), British
American Tobacco Zimbabwe Limited (6.48%) and Ecocash Holdings Zimbabwe Limited
(4.73%). The resource index remained unchanged at 125 531.67 points, during the week under
review.

Market Turnover
During the week under review, the cumulative volume of shares traded on the ZSE declined by
56.30% to 9.54 million shares, from 21.84 million shares traded in the previous week.
Concomitantly, the value of shares traded went down by 39.64%, from ZW$8,335.02 million in
the prior week to ZW$5,031.41 million in the week ending 13th October 2023.

Figure 4 shows the trend in daily market turnover for the period 14th October 2022 to 13th October
2023.


14-Oct-22
28-Oct-22
11-Nov-22
25-Nov-22
09-Dec-22
23-Dec-22
06-Jan-23
20-Jan-23
03-Feb-23
17-Feb-23
03-Mar-23
17-Mar-23
31-Mar-23
14-Apr-23
28-Apr-23
12-May-23
26-May-23
09-Jun-23
23-Jun-23
07-Jul-23
21-Jul-23
04-Aug-23
18-Aug-23
01-Sep-23
15-Sep-23
29-Sep-23
13-Oct-23
Mining Index
All Share and Top 10 Indices
All Share Index (ZSE)
Top 10 Index
Mining Index

Figure 4: Market Turnover

Source: Zimbabwe Stock Exchange, 2023

Market Capitalization
Reflecting bullish trading activity on the local bourse during the week under review, the market
added 4.92%, or ZW$502.79 billion worth of capitalization to close at ZW$10,715.64 billion,
from ZW$10,212.85 billion recorded in the previous week.

Figure 5 shows market capitalization developments for the period from 14th October 2022 to 13th
October 2023.

Figure 5: Market Capitalization

Source: Zimbabwe Stock Exchange, 2023


14-Oct-22
28-Oct-22
11-Nov-22
25-Nov-22
09-Dec-22
23-Dec-22
06-Jan-23
20-Jan-23
03-Feb-23
17-Feb-23
03-Mar-23
17-Mar-23
31-Mar-23
14-Apr-23
28-Apr-23
12-May-23
26-May-23
09-Jun-23
23-Jun-23
07-Jul-23
21-Jul-23
04-Aug-23
18-Aug-23
01-Sep-23
15-Sep-23
29-Sep-23
13-Oct-23
ZW$ (Million)
Negotiated Deal: 241 million
First Mutual Holdings
Limited shares exchanged
hands at ZW$196/share


14-Oct-22
28-Oct-22
11-Nov-22
25-Nov-22
09-Dec-22
23-Dec-22
06-Jan-23
20-Jan-23
03-Feb-23
17-Feb-23
03-Mar-23
17-Mar-23
31-Mar-23
14-Apr-23
28-Apr-23
12-May-23
26-May-23
09-Jun-23
23-Jun-23
07-Jul-23
21-Jul-23
04-Aug-23
18-Aug-23
01-Sep-23
15-Sep-23
29-Sep-23
13-Oct-23
$ Billions

Victoria Falls Stock Exchange (VFEX) Developments
The decline in the VFEX mainstream index emanated from share price losses for First Capital
Bank Limited (32.66%), Padenga Holdings Limited (16.61%), Axia Corporation Limited
(6.40%), Bindura Nickel Corporation (BNC) (5.11%) and Innscor Africa Limited (1.40%).
Partially offsetting the losses was a gain in the share price of Simbisa Brands Limited (0.08%).

VFEX Market Turnover
The cumulative volume and value of shares traded on the VFEX rose by 100.98% and 43.05%
to 2.26 million shares and US$0.54 million, respectively, during the week under review. This
compares to 1.13 million shares and US$0.38 million, respectively, recorded in the week ending
6th October 2023.

VFEX Market Capitalization
Owing to dampened trading activity on the VFEX bourse during the week under review, the
market lost 3.53% worth of capitalization to close at US$1.22 billion, compared to US$1.27
billion recorded in the previous week.

Figure 6 shows the trend in the VFEX All Share Index (ASI) for the period from 14th September
2022 to 13th October 2023.

Figure 6: VFEX All Share Index

Source: Victoria Falls Stock Exchange (VFEX), 2023

RESERVE BANK OF ZIMBABWE

6. BEYOND INFLATION NUMBERS - THE CASE OF SHRINKFLATION

Annual inflation has been elevated across the world, reflecting pent-up demand in the aftermath
of Covid-19 pandemic and Russia-Ukraine war which caused supply chain disruptions. This in
turn has led to monetary tightening by central banks in the quest to combat the high inflation. As
a result, global inflation is expected to decline from 8.7% in 2022 to 6.9% in 2023. While
inflation has been moderating because of central bank monetary policy tightening, a trend of
shrinkflation has been noticed.
Shrinkflation is a strategy in which companies reduce either the size or quantity of products
whilst maintaining prices. Shrinkflation is originally known as downsizing and it’s a term that
comes from the combination of the two words shrink and inflation. Precisely, shrinkflation
means that consumers pay the same price for less. Generally, companies raise prices in response
to increases in production costs to remain profitable, but they know that consumers are very
conscious of price changes. As such, businesses do not want to lose sales, so they reduce quantity
instead of prices. As businesses are aware that consumers are more sensitive to changes in price
than to changes in quantity, and this tendency often allows companies to benefit from
shrinkflation. An example is when a package of the loaf of bread may look the same and sell for
the same price, but instead of the standard 700 grams it is only 600 grams.
The nature of shrinkflation depends on the product and brand, which means it's important for
consumers to compare products and prices as they make their spending decisions. As such,
consumers have the responsibility to notice the changes in the size or quantity of a packaged item
to guard against shrinkflation tendencies. The recent increased tendency of consumers in the
country to buy from unregulated grocery stores make them vulnerable to shrinkflation
tendencies. The challenge with unregulated markets, is that there is limited or no legal recourse
and protection of consumer rights to short changed consumers. Shrinkflation has negative
consequences to consumers and should be minimised at all costs. While the Reserve Bank of
Zimbabwe is mandated to control inflation, consumers must be vigilant to shrinkflation. In
addition, consumer protection bodies and standard associations should also remain vigilant to
shrinkflation tendencies.

RESERVE BANK OF ZIMBABWE


APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR MAINFX1 AND WHOLESALEFX 2


Source: Reserve Bank of Zimbabwe, 2023


1 Main Foreign Currency Auction. The Auction is normally conducted every Tuesday every week.
2 Wholesale Foreign Currency Auction (Wholesale FX). The RBZ MPC resolutions dated 6 June 2023 resolved that with effect from 7 June 2023, the Bank shall sell foreign currency at the market-determined exchange
rate through banks to support and strengthen the foreign exchange interbank market, and banks shall in turn sell the foreign currency to their customers.


19-Sep-23
WHOLESALE FX


26-Sep-23


03-Oct-23


10-Oct-23
Total
Bids (US$ dollars)

19,232,100.00

18,893,948.0

18,682,426.00

18,106,845.96
Amount Allotted (US$
dollars)

18,250,000.00

18,693,948.80

18,682,426.00

18,106,845.96
Highest Rate

Lowest Bid Rate Allotted

Weighted Average Rate

Number of Bids Received

Number of Bids Rejected

APPENDIX 2: SUMMARY OF FOREIGN CURRENCY AUCTION ALLOTMENTS BY PURPOSE
Source: Reserve Bank of Zimbabwe, 2023


19-Sep-23

26-Sep-23

03-Oct-23

10-Oct-23
Raw Materials

Machinery and Equipment

Consumables
(Incl. Spares, Tyres,
Packaging)

Pharmaceuticals and
Chemicals

Services (Loans, Dividends
and Disinvestments)

Retail and Distribution

Fuel, Electricity and Gas

Paper and Packaging

TOTAL
713,950.34
1,123,944.44
1,202,872.38
1,868,427.23