Vol. 25 No. 37


Week Ending
15th September 2023
Weekly Economic
Highlights
TABLE OF CONTENTS


1.
OVERVIEW

This report provides an analysis of the developments in the money and capital markets for the
week ending 15th September 2023. The report also covers developments in the tobacco sales,
mineral commodities, and stock markets during the week. The last section of the report presents
a look at US dollar interest rate margins.


During the week under review, both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls
Stock Exchange (VFEX) exhibited bullish sentiments. Consecutively, the value of transactions
processed through the National Payment System (NPS) were lower during the week under review
compared to the previous week.

The minimum deposit rates for both the domestic currency deposits and foreign currency
deposits remained largely unchanged during the week under review.


The volume and value of tobacco sales as at the end of the week under review were higher
compared to the corresponding period in 2022. Prices of the golden leaf, however, continued to
be lower compared to the same period in the previous year.

2.
INTEREST RATES

Local Currency (ZWL) Deposit Rates

During the week ending 15th September 2023, minimum and maximum ZWL deposit rates for
all classes of deposits remained largely unchanged. Maximum deposit rates for deposits of 3month, 6-month and 12-month tenor, however, registered increases during the same week.

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
(%)
18-Aug-23

25-Aug-23


01-Sep-23

08-Sep-23

15-Sep-23

Source: Reserve Bank of Zimbabwe, 2023

Local Currency Lending Rate

The minimum and maximum ZWL lending rates for individual clients registered an increase
while those for corporate clients were marginally lower during the week under analysis. The
ZWL lending rates are shown in Table 2.


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

Individual Clients

Corporate Clients
11-Aug-23

18-Aug-23

25-Aug-23

01-Sep-23

08-Sep-23

15-Sep-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

During the week under review, minimum and maximum FCA deposit rates for all classes of
deposits remained largely unchanged. Banks continue to actively take measures to attract long
term foreign currency deposits amid firm demand for foreign currency loans by individual and
corporate clients. Average foreign currency deposits rates are 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
(%)
18-Aug-23

25-Aug-23

01-Sep-23

08-Sep-23

15-Sep-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Lending Rates


During the week ending 15th September 2023, minimum foreign currency lending rates (FCA)
for individuals increased by 0.08 percentage points while those for corporate lending rates
registered a decline of 0.07 percentage points during the same week. Maximum lending rates for
both individual and corporate clients registered an increased amid high demand for foreign
currency credit in the economy.

Table 4: Lending Rates (per annum)
Date
Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)

Individual Clients
Corporate Clients

18-Aug-23

25-Aug-23

01-Sep-23

08-Sep-23

15-Sep-23

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

During the week under analysis, aggregate transactions processed in value terms through NPS
platforms stood at ZW$5.10 trillion, representing a decrease of 0.11% from ZW$5.11 trillion in
the previous week. The Real Time Gross Settlement (RTGS) system constituted 87.83% of the
total value of transactions processed through the NPS. In value terms, NPS transactions were
distributed as shown in Figure1.

Figure 1: Composition of NPS Transactions in Value Terms

Source: Reserve Bank of Zimbabwe, 2023
RTGS
87.83%
POS
4.38%
ATM
3.19%
MOBILE
4.60%
RTGS
POS
ATM
MOBILE

The volume of transactions processed through the NPS decreased by 9.58% to close at 10.04
million driven by decreases in RTGS, Mobile, POS and ATM transactions volumes. NPS
transaction volumes were distributed as follows: Mobile, 79.44%; POS, 17.07%; ATM, 1.62%;
and RTGS, 1.87%, 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
08 September 2023
WEEK ENDING
15 September 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


4.
TOBACCO SALES
As at the 119th day of the tobacco selling season, a cumulative total of 296.14 million kilograms
of tobacco had been sold, compared to a cumulative total of 207.73 million kilograms sold during
RTGS, 1.87%
POS, 17.07%
ATM, 1.62%
MOBILE, 79.44%
RTGS
POS
ATM
MOBILE

the same period in 2022. The turnover realized from the sales amounted to US$896. 98 million,
a 41.17% increase, compared to US$635.37 million realized during the same period in 2022.

Table 6: Weekly Cumulative Tobacco Sales: Day 119th (15th September 2023)

Variance (%)
Cumulative Quantity Sold (million
kgs)
207,725,586
296,135,214
42.56
Average Price (US$/kg)
3.06
3.03
-0.97
Cumulative value (US$ million)
635,374,749
896,982,582
41.17
Source: Tobacco Industry and Marketing Board (TIMB), 2023

The golden leaf continued to be sold at a lower average price of US$3.03/kg, during the week
under review, down from US$3.06/kg realized during the same period in 2022.

5.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS


During the week under analysis, international commodity prices for gold, platinum and nickel
fell, while prices for palladium, copper and crude oil increased. Table 7 shows commodity price
developments during the week under review.

Table 7: Metal and Crude Oil Prices for the week ending 15th September 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil

US$/ounce
US$/ounce
US$/ounce
US$/tonne
US$/tonne
US$/barrel
Weekly Average (4 - 8 Sep)

11-Sep

12-Sep

13-Sep

14-Sep

15-Sep

Weekly Average (11 - 15 Sep)

Weekly Change (%)


Source: BBC, KITCO and Bloomberg 2023

Gold

Gold prices eased by 0.59%, from an average of US$1,927.42 per ounce recorded in the previous
week to US$1,915.96 per ounce during the week under review. The price of the yellow metal
fell as investors expected the U.S. Federal Reserve to maintain the interest rates unchanged.

Platinum
Platinum prices continued on a negative trajectory, underpinned by a perceived glut in the market
for the precious metal relative to global demand. Prices decreased by 2.12%, from a weekly
average of US$926.00 per ounce reported in the previous week to US$906.40 per ounce during
the week under review.

Palladium
Palladium prices increased by 1.94% to US$1,237.10 per ounce during the week under review,
from US$1,213.50 per ounce recorded in the previous week. Stronger-than-expected economic
reports from China supported the rise in prices.


Copper
During the week ending 15th September 2023, copper prices rose by 0.65% to US$8,416.50 per
tonne from US$8,362.20 per tonne recorded in the prior week. Prices rose after economic data
from China, the top metals consumer, showed signs of a stabilising economy.

Nickel
Nickel prices were further reduced by 2.40% to close at US$20,083.00 per tonne during the week
under review, from US$20,576.60 per tonne reported in the previous week. The decline in prices
was mainly on account of a stronger U.S. dollar which is expected to dampen demand.

Brent Crude Oil
Crude oil prices improved by 3.13%, from US$90.03 per barrel reported in the previous week to
US$92.85 per barrel during the week under analysis. The increase in oil prices was primarily
driven by stronger-than-expected economic reports and increased demand from China, the
world's second-largest consumer of crude oil.

Exchange Rate Developments
Interbank Market
The Zimbabwe dollar (ZW$) depreciated by 1.95% on the interbank market, from an average of
ZW$4,633.01 per US$1 in the previous week to ZW$4,723.22 per US$1, during the week under
review as shown in Table 8.

Table 8: Selected Exchange Rates (ZW$ per unit of foreign currency)

USD
ZAR
GBP
BWP
EURO
Weekly Average (4 - 8 Sep)

11-Sep

12-Sep

13-Sep

14-Sep

15-Sep

Weekly Average (11 - 15 Sep)

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

Source: Reserve Bank of Zimbabwe, 2023


6. EQUITY MARKETS

During the week ending 15th September 2023, the Zimbabwe Stock Exchange (ZSE) and the
Victoria Falls Stock Exchange (VFEX) were both on a bullish trend. Concomitantly, the ZSE
All Share index and the VFEX All Share index gained by 9.49% and 4.01% to close at 143
231.12 points and 70.79 points, respectively.

Zimbabwe Stock Exchange (ZSE) Developments

The Top 10, Top 15 and Medium Cap indices increased by 11.80%, 9.80% and 5.30% to close
at 69 387.77 points, 93 084.44 points and 483 899.13 points, compared to previous week’s
positions of 62 062.50 points, 84 773.55 points and 459 558.89 points, respectively.

The resource index gained 15% to close at 125 531.67 points from 109 159.36 points during the
week of analysis.

Figure 3 shows developments on the ZSE’s All Share, Top 10 and Mining indices from 16th
September 2022 to 15th September 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
(51.94%), Willdale Limited (46.36%), Zimre Holdings Limited (31.14%), Mashonaland
Holdings Limited (23.99%) and Nmbz Holdings Limited (19.42%).

Losses were registered in the share prices of Dairibord Holdings Limited (22.15%), SeedCo
Limited (15.00%), Tanganda Tea Company Limited (3.54%), British American Tobacco
Zimbabwe Limited (2.38%) and Ok Zimbabwe Limited (0.04%).

Market Turnover

During the week under analysis, cumulative volume of shares traded, and value of shares traded
declined by 89.07% and 72.14% to 27.10 million shares and ZW$14,799.88 million. This
compares to 248.02 million shares and ZW$53,131.23 million recorded in the prior week,
respectively.

Figure 4 shows the trend in daily market turnover for the period 16th September 2022 to 15th
September 2023.


16-Sep-22
30-Sep-22
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
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

Due to the positive trading on the ZSE during the week under review, the market gained 9.33%,
or ZW$973.93 billion worth of capitalization to close at ZW$11,409.03 billion, compared to
ZW$10,435.10 billion registered in the previous week. Figure 5 shows the evolution of market
capitalization for the period 16th September 2022 to 15th September 2023.

Figure 5: Market Capitalization

Source: Zimbabwe Stock Exchange, 2023


16-Sep-22
30-Sep-22
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
ZW$ (Million)
Negotiated Deal: 241 million
First Mutual Holdings
Limited shares exchanged
hands at ZW$196/share


16-Sep-22
30-Sep-22
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
$ Billions

Victoria Falls Stock Exchange (VFEX) Developments

The increase in the VFEX mainstream index was a result of share price gains in First Capital
Bank Limited (48.67%), Innscor Africa Limited (10.72%), Padenga Holdings Limited (3.67%),
Axia Corporation Limited (3.38%) and Simbisa Brands Limited (2.53%).

Partially offsetting the aforementioned gains were declines in the share prices of African Sun
Limited (5.30%), Zimplow Holdings Limited (3.90%) and Seed Co International Vx (3.81%).


VFEX Market Turnover

The VFEX cumulative volume of shares traded increased by 285.95% while the value of shares
traded declined by 6.55% to 5.70 million shares and US$0.42 million compared to 248.02 million
shares and US$ 0.45 million, recorded in the previous week, respectively.

VFEX Market Capitalization

Due to the positive trading activity on the VFEX during the week under review, the market added
4.00% worth of capitalization to close at US$1.21 billion.

Figure 6 shows the trend in the VFEX All Share Index (ASI) for the period 16th September 2022
to 15th September 2023.

Figure 6: VFEX All Share Index

Source: Victoria Falls Stock Exchange (VFEX), 2023

7.
A LOOK AT US DOLLAR INTEREST RATE MARGINS

The banks play an important role in mobilising savings; both foreign and domestic currency
denominated for purposes of investment. Precisely, banks play an important role in supporting
economic activities through maturity transformation from savings of various terms and
maturities to aggregated financial resources that can be invested in physical capital and funds
with different tenors. The foreign currency savings are earned on exports of goods and services,
deposits from free funds of individuals, corporates, and foreign organisations among others
before they are channelled to deficit sectors, individuals and companies that need them for
investment purposes. The efficiency and effectiveness of the banking system intermediation
process is reflected by the banks’ lending margins.
The banking sector currently holds about US$1.2 billion worth of US dollar deposits. The cost
of the US dollar savings in Zimbabwe is represented by the deposit rates paid to the different
classes of US dollar deposit and savings accounts. The interest rate margin between the USD
lending and deposit rates is wider for the domestic market when compared to other offshore
markets, especially in the more developed markets. Figures 7 shows the USD lending – deposit
rate spread for Zimbabwe, which is at least 10 percent and higher than the benchmark US
lending-deposit rate spread of up to 4 percent. The wider spread for Zimbabwe reflects low

16-Sep-22
30-Sep-22
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

deposit rates on foreign currency deposits and higher lending rates on the US dollar loans in the
country.
Fig 7: Zimbabwe Foreign Currency Lending-Deposit Rate Spread

Source: US Fed and Reserve Bank of Zimbabwe, 2023

The US dollar interest rate spread for Zimbabwe remains wide notwithstanding the increase in
the country’s FCA deposits over time. The FCA deposits accounted for close to 88% of the
banking sector total deposits, while FCA loans accounted for 94% of the total banking sector
loans, as of June 2023. The wider US interest rate margin for Zimbabwe is driven by the FED
rate as the benchmark rate on which country specific factors are loaded, including the relatively
low domestic deposit interest rates due to limited sector competition compared to the situations
in the more advanced markets, including the US. In addition, Zimbabwe faces higher bank
operating, administration and intermediation costs, whose premia further raises the domestic US
dollar lending rates over and above the effect of the exchange rate risk posed by the dual currency
system of the county.
Notwithstanding, the notable country challenges that drive the wide US dollar interest margins
for the country, the low foreign currency deposit interest rates present banks with some scope
and leverage to raise the interest rates, especially on the longer-term US deposits and enhance

Banking lending-deposit spread
Minimum 12- Month deposit rate
Maximum Corporate Clients Lending Rate

intermediation and mobilization of foreign currency savings. Such measures are critical in
ensuring that the banks mobilize enough savings for on-lending to the productive sectors.
The Reserve Bank of Zimbabwe has taken proactive measures to enable the financial sector
players to have additional information that assist in enhancing their lending efficiency, which in
the medium to long term should reduce the interest rate margin on the US dollar loans.
Specifically, the Bank has set up the credit registry data to enhance banks’ client risk assessment.
The operationalisation of the collateral registry will go a long way in assisting borrowers to
register various forms of collateral, including alternative collaterals and substitutes that can be
used by lenders to make decisions on lending to individuals and corporates over and above the
conventional collateral assets that are usually used by the banks.

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.


08-August-23
WHOLESALFX
16- Aug-23

29-Aug-23

12-Sep-23
Total
Bids (US$ dollars)
17,518,500.00
18,854,776.00
19,610,040.40

18,726,643.25
Amount Allotted (US$ dollars)
17,518,500.00
18,854,776.00
19,610,040.40

19,610,040.40

Highest Rate

Lowest Bid
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


08-Aug-23

16-Aug-23

29-Aug-23

12-Sep-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
884,829.72
569,439.28
545,877.82
1,161,863.98