Vol. 25 No. 26


Week Ending
30th June 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 30th of June 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 the cost of remittances for Zimbabwe.

The money market interest rates remained high during the week as the Reserve Bank continued
with the tight monetary policy stance during the week under review.

The value of transactions processed through the National Payment System (NPS) increased
during the week under review as both inflation and the exchange rate stabilize. In addition, the
Zimbabwe Stock Exchange (ZSE) rebounded to positive trading in line with positive confidence
on improved economic activity in the wake of the current stabilization measures by the Bank and
Government. The Victoria Falls Stock Exchange (VFEX), however, continued in the negative
trajectory during the week as the official exchange rate appreciates.

The volume of tobacco sales as at the end of the week was 50.40% higher than the volume sold
during the same period in 2022. The turnover realized from the tobacco sales was 49.66% higher
than the US$572.33 million realized during the same period in 2022.

2.
INTEREST RATES

Local Currency (ZWL) Deposit Rates

Commercial bank minimum and maximum ZWL saving deposit rates decreased, while minimum
and maximum deposit interest rates for 1 month and 3 months tenor increased during the week
under review, amid tight monetary conditions which continue to take effect.
Table 1: Average Deposit Rates (per annum)
Date
Savings deposits (%)
1- Month deposit rates (%)

3- Month deposit rates (%)

Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)
2-Jun-23

9-Jun-23

16-Jun-23

23-Jun-23

30-Jun-23

Source: Reserve Bank of Zimbabwe, 2023

Local Currency (ZWL) Lending Rates

The minimum and maximum ZWL lending rates for corporate borrowers were adjusted upwards
during the week under analysis, in part reflecting the effects of tights liquidity conditions in the
market. Similarly, the minimum ZWL lending rates for the individual clients were adjusted
upwardly while the maximum lending rates for the individual clients were marginally reduced.
The ZWL lending rates are shown in Table 2.

Table 2: 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

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

The minimum savings deposits of FCA deposits remained unchanged. 1-month tenor deposits
increased while 3-months tenor decreased. Maximum deposits rates for all classes of FCA
deposits increased during the week under review. Commercial banks continued to offer higher
deposit rates on longer-term FCA deposits to attract long-term foreign currency deposits needed
to support longer-term lending.
Table 3: Average Foreign Currency Deposit Rates (per annum)
Date
Savings deposits (%)
1- Month deposit rates (%)

3- Month deposit rates (%)

Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)
2-Jun-23

9-Jun-23

16-Jun-23

23-Jun-23

30-June-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Lending Rates


Commercial banks foreign currency minimum lending rates were lower for the individual clients
while higher for corporate clients during the week ending 30th June 2023. Maximum lending
rates increased for both individual clients and corporate clients during the week under analysis.

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

Individual Clients

Corporate Clients
26-May-23

2-Jun-23

9-Jun-23

16-Jun-23

23-Jun-23

30-Jun-23

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

The value of transactions processed through the National Payment System (NPS) marginally
increased during the week under review from ZW$4.78 trillion in the previous week to ZW$4.99
trillion. The Real Time Gross Settlement (RTGS) increased by 4.10% to ZW$4.28 trillion, during
the week, reflecting the effects of increases in the volume of transactions and prices. 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

RTGS
85.81%
POS
4.76%
ATM
4.52%
MOBILE
4.91%
RTGS
POS
ATM
MOBILE

The volume of transactions processed through the NPS during the week under review decreased
by 6.51% to 9.85 million, on the back of tight liquidity conditions. In volume terms, the NPS
transactions were distributed 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
23 June 2023

WEEK ENDING

30 June 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 283.01 million kilograms of tobacco had been sold as of 30 June 2023, the
78th day of the tobacco selling season. The volume of tobacco sales represented a 50.40%
increase, compared to the 188.18 million kilograms sold during the same period in 2022. The
turnover realized from the sales amounted to US$856.52 million and was 49.66% higher than
the US$572.33 million realized during the same period in 2022, as shown in Table 6.
RTGS, 2.84%
POS, 18.76%
ATM, 1.58%
MOBILE, 76.82%
RTGS
POS
ATM
MOBILE

Table 6: Weekly Cumulative Tobacco Sales: Day 78 (30th June 2023)

Variance (%)
Cumulative Quantity Sold (million kgs)
188,179,330
283,018,513
50.40
Average Price (US$/kg)
3.04
3.03
-0.49
Cumulative value (US$ million)
572,331,023
856,524,129
49.66
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$3.04/kg realized during the same period in 2022.
5.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS

During the week ending 30th June 2023, prices for most commodities retreated, largely pulled
back by a strengthening US dollar. The dollar appreciated against other currencies as upbeat U.S.
economic data cemented expectations of more rate hikes this year. Table 1 shows developments
in prices for selected commodities, during the week under review.

Table 7: Metals and Crude Oil Prices: Week ending 30th June 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil

US$/ounce
US$/ounce
US$/ounce
US$/tonne
US$/tonne
US$/barrel
Weekly Average (19- 23 June)

26-June

27-June

28-June

29-June

30-June

Weekly Average (26- 30 June)

Weekly Change (%)

Source: BBC, KITCO, and Bloomberg, 2023

Gold

Gold prices exhibited bearish sentiments during the week under review, sliding by 1.20% to
US$1,913.40 per ounce, from US$1,936.68 per ounce in the previous week. Prices were
dampened by a stronger U.S. dollar and hawkish remarks by the Chairman of the US Federal
Reserve, which reinforced the case for further interest rates hikes. These developments
outweighed the safe-haven demand prospects for the precious metal owing to geopolitical
concerns emanating from the Russian-Ukrainian conflict.

Platinum
Platinum prices decreased by 4.16%, from a weekly average of US$954.10 per ounce in the prior
week to US$914.40 per ounce, during the reporting week. The slowdown was largely attributable
to weaker-than-expected economic growth in China, which affected the demand for the precious
metal. The demand for platinum is mainly from the industrial and motor industry.

Palladium
Palladium prices remained on a negative trajectory, declining by 6.16% from a weekly average
of US$1,351.50 per ounce in the previous week to US$1,268.20 per ounce, during the week
under analysis. Prices remained bearish owing to weak global industrial demand, particularly in
the auto manufacturing sector.

Copper
Copper prices declined, as weak data from China, the top metals consumer, weighed down the
demand outlook for the red metal. Resultantly, prices of the red metal decreased by 2.18%, from
an average of 8,517.30 per tonne in the week ending 23rd June 2023 to US$8,331.80 per tonne,
during the week ending 30th June 2023.
Nickel
Nickel prices weakened by 6.45%, from US$21,954.00 per tonne in the prior week to
US$20,538.00 per tonne, during the reporting week, amid weaker-than-expected economic
growth in China, which affected the demand sentiment for the metal.
Brent Crude Oil
During the week under review, crude oil average prices declined by 1.35% to US$74.22 per
barrel, from US$75.24 per barrel recorded in the previous week. Crude oil prices retreated on
account of a stronger US dollar and concerns that sluggish global economic activity could curtail
fuel demand.

6. EXCHANGE RATE DEVELOPMENTS
Interbank Market
The Zimbabwe dollar (ZW$) appreciated by 5.7% on the interbank market, from an average of
ZW$6,826.20 per US$1 in the previous week to ZW$6,435.42 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 (19-23 June)

26-June

27-June

28-June

29-June

30-June

Weekly Average (26-30 June)

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

Source: Reserve Bank of Zimbabwe, 2023


7. EQUITY MARKETS


During the week ending 30th June 2023, the Zimbabwe Stock Exchange (ZSE) rebounded to
positive trading whilst the Victoria Falls Stock Exchange (VFEX) continued in the negative
trajectory. As such, the ZSE All Share Index gained 2.13% and VFEX All Share Index lost 2.61%
to close the week at 171 408.90 points and 76.17 points, respectively

Despite recording somewhat positive trading on the ZSE, the volume and value of shares traded
went down as a result of the prevailing liquidity shortages in the market.

Zimbabwe Stock Exchange (ZSE) Developments
The big counters which are in the Top 10 index, lost 1.21% to 93 034.57 points. However, the
small Cap, medium Cap and the Top 15 indices went up by 30.95%, 10.24% and 0.71% to close
the week at 1 911 327.14 points, 436 363.92 points and 118 830.20 points, respectively. This
compares to 1 459 547.02 points, 395 826.93 points and 117 988.69 points recorded in the prior
week respectively. The resource index went down by 0.05% to close the week at 76 960.49 points
compared to 76 996.87 points recorded in the previous week.

Figure 3 shows developments on the ZSE’s All Share, Top 10 and mining indices from 1st July
2022 to 30th June 2023.2

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


The gains in the mainstream index emanated from share price increases in First Mutual Holdings
Limited (75.94%), Cafca Limited (74.82%), Nmbz Holdings Limited (66.21%), British
American Tobacco Zimbabwe Limited (64.77 %) and Willdale Limited (36.91%)

Partially offsetting the aforementioned gains were losses in share prices of Cbz Holdings Limited
(38.64%), Meikles Limited (3.70%), SeedCo Limited (2.76%), Proplastics Limited (1.56%) and
Zb Financial Holdings Limited (0.27%). The decline in the resource index emanated from a
0.05% loss in the Riozim limited counter, during the week under analysis.

Market Turnover
During the week under analysis, cumulative volume and value of shares traded waned by 75.03%
and 42.08% to 12.28 million shares and ZW$8.13 billion, respectively. This compares to 49.20
million shares and ZW$14.04 billion recorded in the prior week.

Figure 4 shows the trend in daily market turnover for the period 1st 2022 to 30th June 2023.


01-Jul-22
15-Jul-22
29-Jul-22
12-Aug-22
26-Aug-22
09-Sep-22
23-Sep-22
07-Oct-22
21-Oct-22
04-Nov-22
18-Nov-22
02-Dec-22
16-Dec-22
30-Dec-22
13-Jan-23
27-Jan-23
10-Feb-23
24-Feb-23
10-Mar-23
24-Mar-23
07-Apr-23
21-Apr-23
05-May-23
19-May-23
02-Jun-23
16-Jun-23
30-Jun-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 developments on the ZSE, market capitalization increased by 2.24%, or ZW$305.88
billion worth of capitalization to close at ZW$13 987.48 billion, compared to the previous week’s
position of ZW$13 681.60 billion.

Figure 5 shows the evolution of market capitalization for the period 1st July 2022 to 30th June

Figure 5: Market Capitalization


01-Jul-22
15-Jul-22
29-Jul-22
12-Aug-22
26-Aug-22
09-Sep-22
23-Sep-22
07-Oct-22
21-Oct-22
04-Nov-22
18-Nov-22
02-Dec-22
16-Dec-22
30-Dec-22
13-Jan-23
27-Jan-23
10-Feb-23
24-Feb-23
10-Mar-23
24-Mar-23
07-Apr-23
21-Apr-23
05-May-23
19-May-23
02-Jun-23
16-Jun-23
30-Jun-23
ZW$ (Million)
Notable Trades: 31.45 million
Ariston Holdings Limited
shares and 4.26 million Delta
Holdings Limited shares
exchanged hands at
ZW$15.02/share and
ZW$4077/share, respectively.
Negotiated deal: 61.16 million
Lafarge Cement Zimbabwe
Limited shares exchanged
hands at ZW$312.65/share


01-Jul-22
15-Jul-22
29-Jul-22
12-Aug-22
26-Aug-22
09-Sep-22
23-Sep-22
07-Oct-22
21-Oct-22
04-Nov-22
18-Nov-22
02-Dec-22
16-Dec-22
30-Dec-22
13-Jan-23
27-Jan-23
10-Feb-23
24-Feb-23
10-Mar-23
24-Mar-23
07-Apr-23
21-Apr-23
05-May-23
19-May-23
02-Jun-23
16-Jun-23
30-Jun-23
$ Billions

Source: Zimbabwe Stock Exchange, 2023


Victoria Falls Stock Exchange (VFEX) Developments
The decline in the VFEX mainstream index emanated from share price declines in Africa Sun
Limited (10.70%), National Foods Holdings Limited (7.41%), First Capital Bank Limited
(5.26%) and Simbisa Brands Limited (4.98%). Partially offsetting the abovementioned losses
were gains in share prices of Bindura Nickel Corporation (BNC) (6.67%), and Innscor Africa
Limited (0.33%).
VFEX Market Turnover
Despite the negative trajectory as indicated by the major indices, the VFEX cumulative volume
and value of shares traded increased by 151.23% and 22.73% to 5.98 million shares and US$0.95
million, respectively. This is in comparison to 2.38 million shares and US$0.78 million registered
in the previous week, respectively.
VFEX Market Capitalization
Owing to subdued trading activity on the VFEX during the week under analysis, the market lost
2.61%, or US$34.38 million worth of capitalization to close at US$1.29 billion, compared to
US$1.32 billion registered in the previous week

Figure 6 shows the trend in the VFEX All Share Index (ASI) for the period 1st July 2022 to 30th
June 2023.
Figure 6: VFEX All Share Index

Source: Victoria Falls Stock Exchange (VFEX), 2023


Johannesburg Stock Exchange (JSE) Developments

The Johannesburg Stock Exchange (JSE) All-share index was 2.18% higher to close at 76,027.83
points during the week under analysis. JSE market capitalization also rebounded by 2.91% to
close at ZAR21.92 billion during the same period.


Table 7: Johannesburg Stock Exchange (JSE) Statistics
Period
All Share Index
Market Capitalization
(points)
(ZAR billions)
31-May-23
75067.47
22.35
1-June-23
75783.25
22.49
2-June-23
77,126.06
21.97
9-June-23
76,936.11
21.65
16-June-23
78,531.81
22.16
23-Jun-23
74,402.90
21.30
30-Jun-23
76,027.83
21.92
% Change
2.18
2.91
Source: 2023


Figure 3: Johannesburg Stock Exchange (JSE) All Share Index
Source:


8. THE COST OF REMITTANCES

The cost of sending remittances remains one of the hinderances constraining their potential to
facilitate development and enhance livelihoods in most developing and emerging countries,
especially in Sub-Saharan Africa. Despite the high cost of sending and receiving remittances for
the low-income countries, they have remained a crucial source of income for households and a
contributor to the economic development of the countries. They have played a significant

5-Jul-22
29-Jul-22
22-Aug-22
15-Sep-22
9-Oct-22
2-Nov-22
26-Nov-22
20-Dec-22
13-Jan-23
6-Feb-23
2-Mar-23
26-Mar-23
19-Apr-23
13-May-23
6-Jun-23
30-Jun-23

cushioning role against the Covid-19 pandemic and other negative shocks that threatened
external sustainability and incomes in the developing countries.

Diaspora remittances are sent using both formal and informal channels, which determine the
effective cost of sending and receiving the remittances. The formal channels are largely
constituted by the systems of banks and authorized dealers while the informal channels involve
sending the remittances by relatives, friends, and cross boarder transporters. While the global
average cost of sending and receiving remittances stands at about 6% of the transacted amount,
the average cost for Sub-Saharan African countries is about 7.9%. South Asia has the lowest cost
of 4% for diaspora remittances and closer to the UN target of 3% by the year 2030.

Figure 8: Average Cost for Remitting US$200

Source: World Bank 2022

Despite efforts to reduce the cost of remittances in the SADC region at both country and regional
levels, the costs remain relatively high. In the year 2019 the SADC regional average prices for
remittances were 9.4%, which is higher than the average for SSA. However, regional efforts,
which include increased digitalisation, modernisation and harmonisation of the regional payment
systems to increase the speed of financial transactions have started to bear fruits that have seen
the average cost for remittances in the region declining from 9.4% in 2019 to 7.1% by 2021.

Figure 9 shows the intra SADC region costs for remittances between South Africa and some
selected countries in the region.

Figure 9: Intra SADC Regional Costs for Remittances

Source: FINMARK TRUST & UKAID

The cost for remittances between Zimbabwe and South Africa, which is the leading source
country for remittance flows into Zimbabwe, accounting for at least 33% of the country’s total
inward remittances declined from 10.3% to 7.1% between 2019 and 2021. The cost for
remittances for the country, however, remain relatively high compared to other regional countries
that include Eswatini, Lesotho and Namibia which enjoy the advantages of being part of the
Common Monetary Area with South Africa. The remittances cost on the UK-Zimbabwe corridor
also remains relatively high at 6.14% and above the 3% UN target, which calls for concerted
efforts to reduce the costs for the country to enjoy maximum benefits for the diaspora
remittances. The high costs associated with sending remittances between Zimbabwe and source
countries such as South Africa have led to some remittance senders resorting to using informal
channels for receiving funds, which is both risky and an implicit cost for the country in terms of
the utilization of the resources for national development and upliftment of livelihoods.

The gap between the current costs for sending remittances in the SADC region and Zimbabwe
in particular in relation to both the global average and the average for the least cost regions such

as Asia clearly shows that there is still great unexploited room for growth and more contribution
towards development for the remittances for the country. The Government and Reserve Bank,
therefore, seek to continuously implement measures and policies that are earmarked to promote
inward remittances into the country, including creating a more competitive and sounder domestic
financial sector that is capable of competitive pricing.

The country currently has a wide range of sectors that serve as safe and profitable areas into
which Zimbabweans in the diaspora can invest. The sectors include mining, energy and mineral
value addition, including lithium-based manufactures and semi-manufactures. Zimbabweans
living and working in the diaspora together with local and foreign investment companies are
challenged to innovate around the diaspora resources into investible funds.


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.

MAINFX
9-June-23 13-June-23 20-June-23 27-June-23
WHOLESALEFX
20-June-23 27-June-23 29-June-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
9-June-23 16-June-23 23June-23 27-June-23
Raw Materials

Machinery and Equipment

Consumables
(Incl. Spares, Tyres,
Packaging)

Pharmaceuticals and
Chemicals
149,967.54
63,406.00
-

-
Services (Loans, Dividends
and Disinvestments)

Retail and Distribution

Fuel, Electricity and Gas

Paper and Packaging

TOTAL
4,158,013.57
2,945,406.28
1,135,542.46
797,323.53