Vol. 25 No. 45


Week Ending
10th November 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 10th November 2023. The report also covers developments in mineral commodity
prices and stock markets, during the same week. The last section of the report presents a brief on
inflation expectations in Zimbabwe.

The Zimbabwe Stock Exchange (ZSE) and Victoria Falls Stock Exchange (VFEX) registered
gains, during the week under analysis. The country’s National Payment Systems (NPS)
processed transactions valued at ZW$5.62 trillion during the reporting week, reflecting a
decrease of 6.64% compared to the previous week.

Minimum and maximum deposit rates for foreign currency deposits remained unchanged, during
the week ending 10th November 2023. In the same week, international commodity prices for
gold, platinum, palladium, copper, crude oil, nickel, and lithium declined.

1. INTEREST RATES


Local Currency (ZW$) Deposit Rates

During the week ending 10th November 2023, minimum and maximum deposit rates for all
deposit classes remained largely unchanged, as is shown in Table 1.

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
(%)
13-Oct-23

20-Oct-23

27-Oct-23

3-Nov-23

10-Nov-23

Source: Reserve Bank of Zimbabwe, 2023

Local Currency (ZW$) Lending Rates
During the week under analysis minimum lending rates for individual clients declined while
those for corporate clients registered increases. Maximum lending rates for both individuals and
corporates, however, registered declines. The commercial lending rates were as shown in Table
2.

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

Individual Clients

Corporate Clients

13-Oct-23

20-Oct-23

27-Oct-23

3-Nov-23

10-Nov-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

During the week under review, minimum and maximum foreign currency deposit rates for all
deposit classes remained unchanged, as is 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
(%)
13-Oct-23

20-Oct-23

27-Oct-23

3-Nov-23

10-Nov-23

Source: Reserve Bank of Zimbabwe, 2023


Foreign Currency (USD) Lending Rates
Minimum foreign currency lending rates for individual clients remained unchanged at previous
week levels, while those for corporates were lower during the week under analysis. Maximum

lending rates for individual clients and corporate clients decreased by 0.03 and 0.02 percentage
points, respectively, during the same week.

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

Individual Clients
Corporate Clients

6-Oct-23

13-Oct-23

20-Oct-23

27-Oct-23

3-Nov-23

10-Nov-23

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

The total value of transactions processed through the National Payment Systems (NPS) platforms
declined by 6.64% to close at ZW$5.62 trillion, during the week ending 10th November 2023.
Transactions processed through the Real Time Gross Settlement (RTGS) system also decreased
by 5.78% to close at ZW$4.66 trillion, during the reporting week. In value terms, the distribution
of NPS transactions was as follows: Real Time Gross Settlement (RTGS), 82.98%; Mobile,
6.60%, Point of Sale (POS), 5.72% and Automated Teller Machines (ATM), 4.71%, 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 decreased by 0.75% to close at 13.46
million, largely due to increases in mobile transaction volumes. The NPS transaction volumes
RTGS
82.98%
POS
5.72%
ATM
4.71%
MOBILE
6.60%
RTGS
POS
ATM
MOBILE

were distributed as follows: Mobile, 83.52%; POS, 13.96%; ATM, 1.14%; and RTGS, 1.39%,
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
03 NOVEMBER

WEEK ENDING
10 NOVEMBER

% 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

3. INTERNATIONAL COMMODITY PRICE DEVELOPMENTS


During the week ending 10th November 2023, international commodity prices for gold, platinum,
palladium, crude oil, nickel and lithium declined as is shown in Table 6. International commodity
markets were largely weighed down by a relatively stronger US dollar and the poor demand
outlook triggered by fears of further monetary and financial tightening, during the trading week.

RTGS, 1.39%
POS, 13.96%
ATM, 1.14%
MOBILE, 83.52%
RTGS
POS
ATM
MOBILE

Table 6: Metal and Crude Oil Prices for the week ending 10th November 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
(30 Oct – 03Nov)

6-Nov

7-Nov

8-Nov

9-Nov

10-Nov

Weekly Average
(06 - 10 Nov)

Weekly Change

Source: BBC, KITCO and Bloomberg 2023

Precious Metals

During the week under review, gold, platinum, palladium, and lithium prices declined by 1.46%,
4.24%, 7.44%, and 1.13%, respectively, as indicated in Table 6. The downward trend in platinum
prices was attributable to a stronger dollar, coupled with concerns regarding future demand,
triggered by the release of mixed economic data from China, the leading consumer of platinum.
The decrease in gold prices can be primarily attributed to the reduction in safe-haven demand,
coupled with the more cautious outlook expressed by the Federal Reserve, which further
contributed to the downward trend.

Palladium prices significantly decreased to their lowest levels in five years, falling below $1,000
per ounce. The decline was accelerated by a slowdown in automobile sales and car manufacturers
opting for more affordable platinum in their catalytic converters. Similarly, lithium prices faced
a downturn due to the decline in demand from the electric vehicle industry. Figure 3 shows the
trend in precious metal prices from 6 November 2023 to 10 November 2023.

Figure 3: Weekly Precious Metals Price Developments (06 Nov. 2023 - 10 Nov. 2023)

Source: Kitco,2023

Source: Kitco,2023

Source: Kitco,2023

Source: London Metal Exchange,2023


Base Metals and Brent Crude Oil
Prices for copper, nickel and crude oil fell by 0.29%, 1.30% and 5.33%, respectively, during the
week ending 10 November 2023. This was on account of uncertainty over economic recovery in
China, the world’s top metal consumer. In addition, the interest rate outlook weighed down on
investor sentiments. Crude oil prices declined as weak global economic data overshadowed
concerns that the Israel-Hamas war could erupt into a broader regional conflict.


6-Nov 7-Nov 8-Nov 9-Nov 10-Nov
Axis Title
Gold
Gold
Linear (Gold)

6-Nov 7-Nov 8-Nov 9-Nov 10-Nov
Axis Title
Platinum
Platinum
Linear (Platinum)

6-Nov 7-Nov 8-Nov 9-Nov 10-Nov
Axis Title
Palladium
Palladium
Linear (Palladium)

6-Nov 7-Nov 8-Nov 9-Nov 10-Nov
Axis Title
Lithium Hydroxide
Lithium Hydroxide
Linear (Lithium Hydroxide)

Figure 4: Daily Commodity Price Developments for Copper, Nickel and Brent Crude Oil
(03 Nov. 2023 - 10 Nov. 2023)

Source: London Metal Exchange,2023

Source: London Metal Exchange,2023

Source: BBC,2023

6-Nov
7-Nov
8-Nov
9-Nov
10-Nov
US$/tonne
6-Nov
7-Nov
8-Nov
9-Nov
10-Nov
Copper

Copper
Copper
Linear (Copper)

6-Nov
7-Nov
8-Nov
9-Nov
10-Nov
6-Nov
7-Nov
8-Nov
9-Nov
10-Nov
Nickel

Nickel
Nickel
Linear (Nickel)

6-Nov
7-Nov
8-Nov
9-Nov
10-Nov
6-Nov
7-Nov
8-Nov
9-Nov
10-Nov
Brent crude oil

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

Exchange Rate Developments
Interbank Market

The Zimbabwe dollar (ZW$) marginally depreciated by 0.15% on the interbank market, from an
average of ZW$5,723.22 per US$1 in the prior week to ZW$5,731.52 per US$1 during the week
under analysis, as shown in Table 7.

Table 7: Selected Exchange Rates (ZW$ per unit of foreign currency)

USD
ZAR
GBP
BWP
EURO
Weekly Average (30 Oct – 03 Nov)

6-Nov

7-Nov

8-Nov

9-Nov

10-Nov

Weekly Average (06 – 10 Nov)

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

Source: Reserve Bank of Zimbabwe, 2023

4. EQUITY MARKETS


During the week ending 10th November 2023, both the Zimbabwe Stock Exchange (ZSE) and
Victoria Falls Stock Exchange (VFEX) were bullish. Resultantly, the ZSE and VFEX All Share
Indices added 7.97% and 0.70% to close at 173 883.74 points and 68.06 points, respectively.

Zimbabwe Stock Exchange (ZSE) Developments

The Top 10, Top 15, Medium and Small Cap indices added 7.09%, 8.26%, 9.95% and 0.01% to
close at 76 606.36 points, 104 347.52 points 713 116.49 points and 5 343 533.69 points,
respectively.

Figure 5 shows developments on the ZSE’s All Share, Top 10 and Mining indices from 11th
November 2022 to 10th November 2023.

Figure 5: ZSE All Share, Top 10 and Mining Indices

Source: Zimbabwe Stock Exchange, 2023


The gains in the mainstream index resulted from share price increases for TSL Limited (74.87%),
Zimbabwe Newspapers (1980) Limited (32.14%), ZECO Holdings Limited (20.85%), First
Mutual Holdings Limited (15.33%) and Fidelity Life Assurance Limited (13.51%).

Losses were recorded in share prices of General Beltings Holdings Limited (7.85%), CAFCA
Limited (6.38%), Ecocash Holdings Zimbabwe Limited (5.85%), SeedCo Limited (2.36%) and
Nampack Zimbabwe Limited Limited (0.07%). The resource index added 7.25% to close at 134
627.40 points, compared to 125 531.67 points recorded in the prior week.

Market Turnover
The cumulative volume and value of shares traded on the ZSE increased by 195.29% and 51.27%
to 46.16 million shares and ZW$9 332.16, respectively. This compares to 15.65 million shares
and ZW$8 365.97 million, recorded in the previous week, respectively. The increase in turnover
volumes and values was largely informed by notable trade deals where 19.65 million OK
Zimbabwe Limited shares and 6.6 million Econet Wireless Zimbabwe shares exchanged hands
at ZW$500 and ZW$170, respectively.

Figure 6 shows the trend in daily market turnover for the period from 11th November 2022 to
10th November 2023.


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
27-Oct-23
10-Nov-23
Mining Index
All Share and Top 10 Indices
All Share Index (ZSE)
Top 10 Index
Mining Index

Figure 6: Market Turnover
Source: Zimbabwe Stock Exchange, 2023

Market Capitalization

Owing to the positive sentiments on the ZSE during the week under review, the market gained
8.09%, or ZW$1 042.55 billion worth of capitalization to close at ZW$13 926.15 billion, from
ZW$12 883.61 billion recorded in the prior week. Figure 7 shows the evolution of market
capitalization for the period from 11th November 2022 to 10th November 2023.
Figure 7: Market Capitalization

Source: Zimbabwe Stock Exchange, 2023


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
27-Oct-23
10-Nov-23
ZW$ (Million)
Negotiated Deal: 241 million
First Mutual Holdings
Limited shares exchanged
hands at ZW$196/share


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
27-Oct-23
10-Nov-23
$ Billions

Victoria Falls Stock Exchange (VFEX) Developments
The rise in the VFEX mainstream index emanated from share price gains for First Capital Bank
Limited (13.66%), African Sun Limited (6.50%), Axia Corporation Limited (5.88%), Padenga
Holdings Limited (2.94%) and Bindura Nickel Corporation (BNC) (0.89%). Partially offsetting
the gains were declines in share prices of SeedCo International VX (4.89%) and Simbisa Brands
Limited (2.57%).

VFEX Market Turnover

The volume and value of shares traded on the VFEX declined by 70.84% and 35.51% to 2.44
million shares and US$0.77 million, respectively. This compares to 8.37 million shares and
US$1.19 million recorded in the previous week.

VFEX Market Capitalization

Reflecting improved investor appetite on the USD denominated bourse during the week under
analysis, VFEX capitalization added 0.69% to close at US$1.16 billion. Figure 8 shows the trend
in the VFEX All Share Index (ASI) for the period from 11th November 2022 to 10th November
2023.

Figure 8: VFEX All Share Index
Source: Victoria Falls Stock Exchange (VFEX), 2023
5. INFLATION EXPECTATIONS IN ZIMBABWE
Inflation expectations are an important factor in shaping decisions on consumption, wages and
investment and they also inform the design of monetary policy by the Central Bank. Inflation

expectations particularly point to the inflation rate anticipated by corporates, individuals and
policy makers.
The evolution of inflation expectations is shaped by the developments in actual inflation. Hence,
the experience of higher historical inflation tends to be associated with a more pronounced
adjustment of past inflation expectations to current inflation. The current cycles of inflation
expectations in Zimbabwe can be traced to past experiences with hyperinflation which may still
exist in memories of economic agents that experienced hyperinflation. Hyperinflation not only
influences households’ contemporary inflation expectations but also impacts how they update
inflation expectations to current inflation, which is consistent with memory theory. International
evidence has shown that hyperinflation experiences result in entrenched negative adaptive
inflation expectations which tend to affect the effectiveness of monetary policy.
The phenomenon of high adverse inflation expectations is not unique to Zimbabwe, as it has also
been observed in other countries with similar experiences of hyperinflation. Precisely, memories
of hyperinflation tend to create a persistent fear factor among economic agents, which continue
to manifest in patches of adverse inflation expectations in times of temporary shocks in the
economy.
As a result of the high adverse inflation expectations, the economy becomes sentiment-driven,
where exchange rate depreciation and pricing tend to be based mainly on perceptions. Any
negative news on the economy tends to result in negative developments in exchange rate and
prices. As such, traditional monetary policy measures based on interest rates, money supply and
Open Market Operations (OMO) may have limitations in effectively addressing inflation. This
is because a significant movement in inflation would not be explained by macroeconomic
fundamentals.
In this regard, in addition to traditional monetary policy tools, there is need for a granular
approach to dealing with inflation expectations, including putting in place innovative investment
solutions that preserve value. In addition, consistency and predictability of policies are also key
in fostering positive inflation expectations. While the Bank is committed to anchoring inflation
expectations in the economy, both the private sector and general public also have a role to play
in shaping positive expectations in the economy.
RESERVE BANK OF ZIMBABWE


APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR WHOLESALEFX1


Source: Reserve Bank of Zimbabwe, 2023


1 Wholesale Foreign Currency Auction (Wholesale FX) is normally conducted on Tuesday every week. 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.
WHOLESALE FX


18-Oct-23


24-Oct-23


30-Oct-23


07-Nov-23
Total
Bids (US$ dollars)

Amount Allotted (US$
dollars)

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


18-Oct-23

24-Oct-23

30-Oct-23

07-Nov-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
1,937,178.64
1,958,167.67
1,582,724.27
1,899,339.62