Vol. 25 No. 27


Week Ending
7th July 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 7 July 2023. The report also covers developments in the tobacco, mineral
commodities, gold coins and stock markets during the week. The last section of the report
presents an analysis of import trends in Zimbabwe.

The value of transactions processed through the National Payment System (NPS) significantly
decreased during the week under review, reflecting the effects of the current tight monetary
conditions on domestic demand. The Zimbabwe Stock Exchange (ZSE) and the Victoria Falls
Stock Exchange (VEFX) traded on a negative trajectory during the period, due to exchange rate
uncertainties among other factors. This was on the back of tight liquidity conditions in the
market.

Demand for the local currency continues to remain strong amid continued appreciation of the
official exchange rate of the local unit against major foreign currencies. The deposit rates on both
the domestic currency and foreign currency deposits remained generally unchanged, while the
lending rates on the ZWL loans marginally tightened 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 prices were, however,
lower during the same period under analysis.

2.
INTEREST RATES

Local Currency (ZWL) Deposit Rates

The deposit rates remained generally unchanged during the week under review across all the
savings and deposit tenors, except for marginal declines on the minimum savings deposit rate
and the 1-month maximum deposit rates. Commercial banks continued to offer higher deposit
rates for long term deposits as banks seek to encourage more long-term deposits amid the tight
market liquidity conditions.


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
(%)
16-Jun-23

23-Jun-23

30-Jun-23

7-July-23


Source: Reserve Bank of Zimbabwe, 2023


Local Currency (ZWL) Lending Rates

The minimum ZWL lending rates for individual clients reduced while those for corporate clients
were raised during the week under review. Maximum ZWL lending rates for individuals were
marginally increased while the ZWL maximum lending rates for corporate clients softened
during the week. The downward review of the corporate lending rates is necessary to support
industry activity. The ZWL lending rates are shown in Table 2.


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

Individual Clients

Corporate Clients
9-Jun-23

16-Jun-23

23-Jun-23

30-Jun-23


7-July-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

The minimum and maximum deposits rates on foreign currency deposits of all tenors remained
largely unchanged during the week under review, except for the minimum FCA deposit rates on
1-month tenor deposits, which were lower during the same period.


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
(%)
16-Jun-23

23-Jun-23

30-June-23

7-July-23

Source: Reserve Bank of Zimbabwe, 2023


Foreign Currency (USD) Lending Rates


The minimum FCA lending rates for commercial banks for individuals increased marginally
during the period under review while those for corporate clients softened during the same period.
The maximum lending rates for individuals and corporates declined during the week under
analysis. The reduction in FCA lending rates for corporates should complement the reduction in
corporate lending rates on ZWL loans in supporting industry and production.

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

Individual Clients

Corporate Clients
2-Jun-23

9-Jun-23

16-Jun-23

23-Jun-23

30-Jun-23

7-July-23

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

The value of transactions processed through the National Payment System (NPS) declined during
the week under review from ZW$4.99 trillion in the previous week to ZW$4.60 trillion during
the week under analysis. The Real Time Gross Settlement RTGS transaction values were 12%
lower to close at ZW$3.75 trillion during the week under review amid prevailing tight liquidity

conditions in the market as stabilisation measures put in place by the Bank and government
continue to take effect. The value of NPS transactions during the week were distributed as shown
in Figure 1.

Figure 1: Composition of NPS Transactions in Value Terms

Source: Reserve Bank of Zimbabwe, 2023


The volume of transactions processed through the NPS during the week under review increased
6.53% to 10.50 million. In volume terms, the NPS transactions were distributed as follows:
Mobile, 76.97%; POS, 18.92%; RTGS, 2.51%; and ATM, 1.60%, shown in Figure 2.


Figure 2: Composition of NPS Transactions in Volume Terms

Source: Reserve Bank of Zimbabwe, 2023


RTGS
81.48%
POS
6.50%
ATM
5.87%
MOBILE
6.14%
RTGS
POS
ATM
MOBILE
RTGS, 2.51%
POS, 18.92%
ATM, 1.60%
MOBILE, 76.97%
RTGS
POS
ATM
MOBILE

Table 5: National Payment Systems Activity
PAYMENT
STREAM
WEEK ENDING
30 June 2023

WEEK ENDING

07 July 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
A cumulative total of 286.09 million kilograms of tobacco had been sold as at 7th July 2023, the
83rd day of the tobacco selling season. The volume of tobacco sales stood at 286 million during
the week under analysis, compared to the 193.09 million kilograms sold during the same period
in 2022. The turnover realized from the sales amounted to US$868.86 million compared to
US$587.99 million realized during the same period in 2022, as shown in Table 6.

Table 6: Weekly Cumulative Tobacco Sales: Day 83 (7th July 2023)

Variance (%)
Cumulative Quantity Sold (million
kgs)
193,094,428
286,872,954
48.57
Average Price (US$/kg)
3.05
3.03
-0.70
Cumulative value (US$ million)
587,985,329
868,864,119
47.77
Source: Tobacco Industry and Marketing Board (TIMB), 2023

The golden leaf was sold at an average price of US$3.03/kg, during the week under review, down
from US$3.05/kg realized during the same period in 2022.
5.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS

During the week ending 7th July 2023, commodity prices for gold, nickel, and crude oil rose,
whilst platinum, palladium, and copper prices retreated, as shown in Table 7.


Table 7: Metals and Crude Oil Prices: Week ending 7th July 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil

US$/ounc
e
US$/ounc
e
US$/ounc
e
US$/tonn
e
US$/tonne
US$/barre
l
Weekly Average (26 - 30
June)

3-July

4-July

5-July

6-July

7-July

Weekly Average (3 - 7 July)

Weekly Change (%)

Source: BBC, KITCO and Bloomberg 2023

Gold

Gold prices increased by 0.44% to close the week ending 7th July at US$1,921.89 per ounce,
from US$1,913.40 per ounce recorded in the previous week. Prices were supported by investor
speculation that the Federal Reserve would be ending its tight monetary policy stance.

Platinum
Platinum prices declined by 0.22%, from a weekly average of US$914.40 per ounce in the
previous week to US$912.40 per ounce, during the week under review. The anticipated
slowdown in China's economic growth largely weighed down platinum prices.

Palladium
Palladium prices declined by 2.14%, from US$1,268.20 per ounce in the prior week to
US$1,241.00 per ounce, during the week under review. The decline was mainly attributed to
weak global industrial demand, particularly in the automotive industry.

Copper
The price of copper declined by 0.15%, from an average of US$8,331.80 per tonne in the
previous week to US$8,319.60 per tonne, during the week under review. This followed weak
demand from China, the world's largest consumer of metals.

Nickel
Nickel prices rose by 1.05%, from US$20,538.00 per tonne recorded in the previous week to
US$20,754.40 per tonne, during the week under analysis. Nickel inventories fell to historically
low levels, against the background of stable demand, boosting prices.

Brent Crude Oil
The average price of crude oil rose by 3.08% to US$76.51 per barrel, compared to the previous
week average of US$74.22 per barrel, on account of supply constraints following output cuts in
key producing countries, such as Russia and Saudi Arabia, as well as the anticipated rebound in
demand in the US, the world's largest oil consumer.
Exchange Rate Developments
Interbank Market
The Zimbabwe dollar (ZW$) appreciated by 14.1% on the interbank market, from an average of
ZW$6,435.24 per US$1 in the previous week to ZW$5,528.17 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 (26-30 June)

3-July

4-July

5-July

6-July

7-July

Weekly Average (3-7 July)

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

Source: Reserve Bank of Zimbabwe, 2023


6. EQUITY MARKETS


During the week ending 7th July 2023, the Zimbabwe Stock Exchange (ZSE) and the Victoria
Falls Stock Exchange (VFEX) traded on a negative trajectory. As such, the ZSE All Share and
VFEX All Share indices lost 9.39% and 2.29% to close the week at 155 307.10 points and
74.43 points, respectively.

Zimbabwe Stock Exchange (ZSE) Developments
The Top 10 and Top 15 indices lost 15.32% and 12.42% to close at 78 782.22 and 104 068.57
points compared to 93 034.57 points and 118 830.20 points in the previous week, respectively.
The Small Cap and the medium Cap indices, however, gained by 13.32% and 8.71% to close the
week at 2 165 867.69 points and 474 390.67 points, respectively.


The resources index gained by 13.12% to close the week at 87 058.77 points compared to 76
960.49 points recorded in the previous week. Figure 3 shows developments on the ZSE’s All
Share, Top 10 and mining indices from 8th July 2022 to 7th June 2023.

Figure 3: ZSE All Share, Top 10 and Mining Indices
Source: Zimbabwe Stock Exchange, 2023


The decline in the mainstream index emanated from losses in share prices of CBZ Holdings
Limited (55.62%), Meikles Limited (33.08%), Dairibord Holdings Limited (15.89%), Econet
Wireless Zimbabwe Limited (14.88%) and FBC Holdings Limited (14.31%).

Partially offsetting the abovementioned losses were share price increases in First Mutual
Holdings Limited (91.15%), Nampak Zimbabwe Limited (72.47%), CAFCA Limited (63.52%),
Rainbow Tourism Group Limited (39.84%) and Masimba Holdings Limited (33.62 %). The
increase in the resource index emanated from a 13.12% gain in RioZim Limited counter.

Market Turnover
During the week under analysis, trading activity was largely concentrated in low-tier counters.
Therefore, cumulative value of shares traded declined by 1.04%, despite a 689.25% increase in
volume of shares traded, amounting to 96.95 million shares. Figure 4 shows the trend in daily
market turnover for the period 8th July 2022 to 7th July 2023.


08-Jul-22
22-Jul-22
05-Aug-22
19-Aug-22
02-Sep-22
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
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 Capitalisation
Reflecting the developments on the local bourse during the week under review, the market lost
9.73%, or ZW$1 361.24 billion worth of capitalization to close at ZW$12 626.24 billion,
compared to the previous week’s position of ZW$13 987.48 billion. Figure 5 shows the evolution
of market capitalization for the period 8th July 2022 to 7th July 2023

Figure 5: Market Capitalization

Source: Zimbabwe Stock Exchange, 2023


Victoria Falls Stock Exchange (VFEX) Developments


08-Jul-22
22-Jul-22
05-Aug-22
19-Aug-22
02-Sep-22
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
ZW$ (Million)
Notable Trades: 31.45 million
Ariston Holdings Limited
shares and 4.26 million Delta
Holdings Limited shares
exchanged hands at
Negotiated deal: 61.16 million
Lafarge Cement Zimbabwe
Limited shares exchanged


08-Jul-22
22-Jul-22
05-Aug-22
19-Aug-22
02-Sep-22
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
$ Billions

The decline in the VFEX mainstream index stemmed from share price decreases in Axia
Corporation Limited (22.48%), Bindura Nickel Corporation (BNC) (20.00%), African Sun
Limited (11.81%), Padenga Holdings Limited (7.17%) and Seed Co International Vx (1.67).
Partially offsetting the abovementioned losses was a gain in share price of First Capital Bank
Limited (11.11%).

VFEX Market Turnover
The VFEX cumulative volume of shares traded declined by 31.18% to 4.12 million shares from
5.98 million shares recorded in the previous week. The value of shares traded, however,
increased by 3.82% to ZW$0.99 million compared to ZW$0.95 million recorded in the previous
week.

VFEX Market Capitalization
Reflecting the bearish trading activity on the VFEX during the week under analysis, the market
lost 2.29%, or US$29.39 million worth of capitalization to close at US$1.26 billion, compared
to US$1.29 billion registered in the previous week. Figure 6 shows the trend in the VFEX All
Share Index (ASI) for the period 8th July 2022 to 7th June 2023.

Figure 6: VFEX All Share Index

Source: Victoria Falls Stock Exchange (VFEX), 2023

7. TRENDS IN ZIMBABWE IMPORTS

Zimbabwe remains import intensive, with imports constituting at least 40% of domestic
manufacturing sector production. The country imports machinery and capital components,
energy, raw materials, finished products and services, which are all important for supporting
domestic production or augmenting locally produced and supplied products. The current increase
in production, reflected by growth in industry capacity utilization, which grew from 47% in 2021
to 63% in 20221 resulted in increased demand for imports. However, to the extent that the country
becomes more inward-looking and embarking on higher import substitution to sustain the
increase in industry capacity utilization, the increase in production and capacity utilization
should lead to reduced demand for imports in the medium to long term, thus enabling the country
to start building on its foreign currency reserves.
The country imported a total of US$4.8 billion worth of goods in 2019, which increased by 78%
to US$8.63 billion in 2022, with the foreign currency auction system contributing significantly
towards the increase. Intermediate goods imports such as capital components and semi-processed
goods dominate the import mix, accounting for between 45% and 50% of total imports between
2019 and 2022, while the proportion of imports for raw materials, which had fallen to 6% in
2019 increased to a peak of 14% in 2020 before moderating to 9% in 2022. Figure 8 shows the
trends of imports of goods by broad category.
Table 8: Imports of Goods by Broad Economic Categories (BECs)
Source: Reserve Bank of Zimbabwe 2023

1 According to ZNCC report 2023


Billions
Raw materials
Capital goods
Consumer Goods
Other
Intermediate Goods

The moderation in the demand for raw materials amid growing economic activity, reflects
increased efforts by industry to rely more on local raw material as a coping strategy during and
after the supply disruptions associated with Covid-19. The demand for imported capital goods
has been increasing steadily over the years. It increased from an average of 14% before 2018 to
more than 20% by 2022, reflecting the growing demand for imports of machinery, equipment,
and technology, which is critical for industry re-tooling and re-capitalization in support of the
increasing economic activity in the economy.
The proportion of consumer goods imports in total imports has been gradually falling over the
recent years, falling from an average of over 13% before 2018 to about 10% by 2022, reflecting
greater substitute of locally produced goods for imports by the consumers. The increase in import
substitution both at production and consumption levels is important not only in terms of
supporting the domestic producers and employment, but also in easing pressure on the demand
for foreign currency. The support for such industrialization strategy through appropriate policies
is important for the sustenance of a health external position for the country.

The recent import trends suggest that the country is increasingly relying on locally manufactured
materials and consumption goods. The increase in import substitution by the economy is both a
result of the disruptions of the traditional supply-chain disruptions during Covid-19 as well as
the effects of deliberate policy measures and interventions by Government, including industry
support through the foreign currency auction, well-structured import taxes and appropriate forex
market reforms.


RESERVE BANK OF ZIMBABWE

APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR MAINFX2 AND WHOLESALEFX 3
Source: Reserve Bank of Zimbabwe, 2023

2 Main Foreign Currency Auction. The Auction is normally conducted every Tuesday every week.
3 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.


MAINFX
9-June-23 13-June-23 20-June-23 27-June-23
WHOLESALEFX
29-June-23 04-July-23 06-July-23
Total
Bids (US$ dollars)

Amount Allotted
(US$ dollars)

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

Purpose
MAINFX
13-June-23 20-June-23 27-June-23 04-July-23
Raw Materials

Machinery and Equipment

Consumables
(Incl. Spares, Tyres,
Packaging)

Pharmaceuticals and
Chemicals
63,406.00
-

-
-
Services (Loans, Dividends
and Disinvestments)

Retail and Distribution

Fuel, Electricity and Gas

Paper and Packaging

TOTAL
2,945,406.28
1,135,542.46
797,323.53
580,921.57