Vol. 25 No. 25


Week Ending
23rd June 2023
Weekly Economic
Highlights
TABLE OF CONTENTS


1.
OVERVIEW
This report provides a comprehensive update on the latest developments in the money and capital
markets for the week ending 23rd 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 a brief on remittances and current account surplus.

The monetary conditions remained tight during the week in line with the Bank’s objective to
obtain and sustain inflation and exchange rate stability. The tight conditions are reflected on the
structure of market interest rates, which remained high for both ZWL deposit and lending rates
despite some reductions in the lending rates. The FCA deposits and lending rates remained
largely unchanged during the week, except for the maximum lending rates for the corporates,
which was raised in a move that would cost more for the marginal corporate clients.

The value of transactions processed through the National Payment System (NPS) decreased
during the week under review from ZW$5.62 trillion in the previous week to ZW$4.78 trillion,
also reflecting the effects of the current tight monetary conditions on demand condition. Both
the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) traded in
the negative trajectory as the tight conditions affect demand and supply conditions in the stock
markets. As such, the ZSE and VFEX All Share Indices lost 9.90% and 1.41%, respectively.

The volume of tobacco sales as at the end of the week was 52.22% higher than the volume sold
during the same period in 2022. The turnover realized from the tobacco sales was 51.55 % higher
than the US$553.3 million realized during the same period in 2022.

2.
INTEREST RATES

Local Currency (ZWL) Deposit Rates

Commercial bank minimum saving deposit rates were increased, while minimum deposits for 1
month and 3 months tenor were reduced during the week ending 23 June 2023 amid the current
tight liquidity conditions in the market. The maximum deposit rates were reduced during the
week under review for deposits of all tenures. The structure of the deposit rates should encourage
savings by all depositors including the small savers.

Table 1: Average Deposit Rates (per annum)
Date
Savings deposits (%)
1- Month deposit rates (%)

3- Month deposit rates (%)

Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)
26-May-23

2-Jun-23

9-Jun-23

16-Jun-23

23-Jun-23

Source: Reserve Bank of Zimbabwe, 2023


Local Currency (ZWL) Lending Rates

The ZWL lending rates for both individuals and corporate borrowers were adjusted downwards
during the week under analysis, except for the maximum lending rates for the corporates which
was marginally increased. The lending rates, however, remain high and in line with the current
tight monetary conditions. The ZWL lending rates are shown in Table 2.

Table 2: 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

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

The minimum and maximum deposits rates for all classes of FCA deposits were unchanged
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 (%)
26-May-23

2-Jun-23

9-Jun-23

16-Jun-23

23-Jun-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Lending Rates


Commercial banks minimum lending rates were lower for both the individual and corporate
clients during the week ending 23rd June 2023. Maximum lending rates for individual clients for
remained unchanged whilst those for corporate clients increased during the week under analysis.
This was on the back of higher demand for foreign currency credit in the market. Foreign
currency lending rates are shown in Table 4.

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

Individual Clients

Corporate Clients
19-May-23

26-May-23

2-Jun-23

9-Jun-23

16-Jun-23

23-Jun-23

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

The value of transactions processed through the National Payment System (NPS) decreased
during the week under review from ZW$5.62 trillion in the previous week to ZW$4.78 trillion.
The Real Time Gross Settlement (RTGS) decreased by 19.12% to ZW$4.11 trillion, in reflection

of the current tight local currency liquidity conditions in the market. NPS transactions in value
terms during the week ending 23 June 2023 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 decreased
by 4.65% to 10.54 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


RTGS
86.03%
POS
4.80%
ATM
4.17%
MOBILE
5.00%
RTGS
POS
ATM
MOBILE
RTGS, 1.96%
POS, 20.90%
ATM, 1.80%
MOBILE, 75.35%
RTGS
POS
ATM
MOBILE

Table 5: National Payment Systems Activity
PAYMENT
STREAM
WEEK ENDING
16th June 2023

WEEK ENDING

23th 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 277.35 million kilograms of tobacco had been sold as of 23 June 2023, the
73rd day of the tobacco selling season. The volume of tobacco sales represented a 52.22%
increase, compared to the 182.21 million kilograms sold during the same period in 2022. The
turnover realized from the sales amounted to US$838.48 million and was 51.55% higher than
the US$553.28 million realized during the same period in 2022, as shown in Table 6.

Table 6: Weekly Cumulative Tobacco Sales: Day 73 (23rd June 2023)

Variance (%)
Cumulative Quantity Sold (million kgs)
182,211,207
277,354,001
52.22
Average Price (US$/kg)
3.04
3.02
-0.44
Cumulative value (US$ million)
553,280,176
838,475,702
51.55
Source: Tobacco Industry and Marketing Board (TIMB), 2023

The golden leaf was sold at an average price of US$3.02/kg, during the week under review, down
from US$3.04/kg realized during the same period in 2022.
5.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS

Weekly average prices for gold, platinum, palladium and nickel declined during the week ending
23rd June 2023. Copper and Crude oil, however, rebounded during the same week. Most
commodity prices were weighed down by a stronger US dollar following aggressive comments
by the Federal Reserve Bank. Table 7 shows developments in prices of selected commodities
during the week under review.

Table 7: Metals and Crude Oil Prices: Week ending 23rd June 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil

US$/ounce
US$/ounce
US$/ounce
US$/tonne
US$/tonne
US$/barrel
Weekly Average (12- 16 June)

19-June

20-June

21-June

22-June

23-June

Weekly Average (19- 23 June)

Weekly Change (%)

Source: BBC, KITCO, and Bloomberg, 2023

Gold

Gold prices continued in a negative trajectory sliding by 0.96%, to US$1,936.68 per ounce from
US$1,955.40 per ounce, in the previous week. Prices were weighed down by a stronger US dollar
and an uptick in the US bond yields following hawkish comments by the Federal Reserve Bank
chairman.

Platinum
Platinum prices declined by 3.35%, from an average of US$987.20 per ounce in the preceding
week to US$954.10 per ounce, during the week ending 23rd June 2023. The decline in the price
of industrial metal was underpinned by the impact of a stronger US dollar against weak industrial
demand.

Palladium
Similarly, palladium prices declined by 1.0%, from a weekly average of US$1,365.10 per ounce
in the previous week to US$1,351.50 per ounce, during the weak under review. Prices slipped as
the US dollar edged higher, thereby dampening the appeal of the metal to holders of other
currencies.

Copper
Copper prices remained on a positive trajectory rising for the fourth consecutive week owing to
dwindling inventories. Prices marginally rose by 0.46%, from an average of US$8,478.70 per
tonne to US$8,517.30 per tonne, during the week ending 23rd June 2023.

Nickel
Nickel prices declined by 1.59%, from US$22,308.00 per tonne in the prior week to US$21,
954.00 per tonne, during the reporting week. Prices retreated following reports of weak industrial
activity in China, though losses were limited by tight global inventories.
Brent Crude Oil
During the week ending 23rd June 2023, average crude oil price increased by 1.25%, to US$75.24
per barrel from US$74.31 per barrel, recorded in the previous week. Oil prices increased on the
back of political crisis in Russia that is impacting supply disruptions.

6. EXCHANGE RATE DEVELOPMENTS

Interbank Market
The Zimbabwe dollar (ZW$) depreciated on the interbank market by 14.2%, from an average of
ZW$5,979.1810 per US$1 in the previous week to ZW$6,826.2048 per US$1, during the week
under review, as is shown in Table 8.
Table 8: Selected Exchange Rates (ZW$ per unit of foreign currency)

USD
ZAR
GBP
BWP
EURO
Weekly Average (12-16 June)

19-June

20-June

21-June

22-June

23-June

Weekly Average (19-23 June)

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

Source: Reserve Bank of Zimbabwe, 2023


7. EQUITY MARKETS


During the week ending 23rd June 2023, both the Zimbabwe Stock Exchange (ZSE) and the
Victoria Falls Stock Exchange (VFEX) traded in the negative trajectory. As such, the ZSE and
VFEX All Share Indices lost 9.90% and 1.41% to close the week at 167 831.48 points and 78.21
points, respectively.

The ZSE traded in the negative for the first time in the year, as a result of liquidity shortages in
the market, a response to the recently announced monetary and fiscal policies, effective 1 June
2023.

Zimbabwe Stock Exchange (ZSE) Developments
The Top 10 and Top 15 indices lost 16.22% and 11.99% to close the week at 94 173.39 points
and 117 988.69 points, respectively. This compares to 112 408.54 points and 134 056.92 points
recorded in the prior week respectively. The resource index, however, added 15.00% to close the
week at 76 996.87 points compared to 66 955.19 points recorded in the prior week.

Figure 3 shows developments on the ZSE’s All Share, Top 10 and mining indices from 24th June
2022 to 23rd 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 share price decreases in Meikles Limited
(35.40%), Delta Corporation Limited (24.26%), OK Zimbabwe Limited (22.20%), StarAfrica
Corporation Limited (21.23%) and TSL Limited (18.75%).


24-Jun-22
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
Mining Index
All Share and Top 10 Indices
All Share Index (ZSE)
Top 10 Index
Mining Index

Partially offsetting the aforementioned decreases, were gains in share prices of CAFCA Limited
(100.98%), FBC Holdings Limited (74.88%), Zimre Holdings Limited (71.24%), Zimplow
Holdings Limited (55.20%) and Unifreight Africa Limited (38.00%). The rise in the resource
index emanated from a 15.00% rise in the Riozim limited counter, during the week under
analysis.
Market Turnover
During the week under analysis, cumulative volume and value of shares traded increased by
28.58% and 4.44% to 49.20 million shares and ZW$14.04 billion, respectively. This compares
to 38.26 million shares and ZW$13.45 billion recorded in the prior week.

Figure 4 shows the trend in daily market turnover for the period 24th June 2022 to 23rd June 2023.

Figure 4: Market Turnover
Source: Zimbabwe Stock Exchange, 2023

Market Capitalisation
Reflecting the developments on the ZSE, market capitalization declined by 10.68%, or ZW$1
635.46 billion worth of capitalization to close at ZW$13 681.60 billion, compared to the previous
week’s position of ZW$15 317.05 billion. Figure 5 shows the evolution of market capitalization
for the period 24th June 2022 to 23rd June 2023.


24-Jun-22
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
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

Figure 5: Market Capitalization

Source: Zimbabwe Stock Exchange, 2023


Victoria Falls Stock Exchange (VFEX) Developments
The decline in the VFEX mainstream index emanated from share price declines in Axia
Corporation Limited (11.21%), Padenga Holdings Limited (5.69%) and Simbisa Brands Limited
(1.72%). Partially offsetting the abovementioned share price losses were gains in share prices of
Bindura Nickel Corporation (BNC) (20.00%), and First Capital Bank Limited (5.56%).

VFEX Market Turnover
The VFEX cumulative volume and value of shares traded increased by 385.44% and 481.28%
to 2.38 million shares and US$0.78 million, respectively. This is in comparison to 0.49 million
shares and US$0.13 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
1.42%, or US$19.04 million worth of capitalization to close at US$1.32 billion, compared to
US$1.34 billion registered in the previous week.

Figure 6 shows the trend in the VFEX All Share Index (ASI) for the period 24th June 2022 to 23rd
June 2023.


24-Jun-22
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
$ Billions

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 5.26% lower to close at 74,402.90
points during the week under analysis. JSE market capitalization also decreased by 3.88% to
close at ZAR21.30 trillion during the same period.


Table 7: Johannesburg Stock Exchange (JSE) Statistics
Period
All Share Index
Market Capitalization
(points)
(ZAR trillions)
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
% Change
-5.26
-3.88
Source: 2023


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


8. GOLD COINS

A total amount of ZW$48.97 billion had been purchased in respect of the gold-backed digital
coins by the 23rd of June 2023.

Table 10: Digital Gold-Backed Coin Purchases (Volume and Value) As at 23 June 2023


9. THE IMPORTANCE OF REMITTANCES IN THE ECONOMY

Remittances constitute an important revenue source at household and national levels in most
developing countries. They are both a cushion and form of insurance for expenditure towards

28-Jun-22
22-Jul-22
15-Aug-22
8-Sep-22
2-Oct-22
26-Oct-22
19-Nov-22
13-Dec-22
6-Jan-23
30-Jan-23
23-Feb-23
19-Mar-23
12-Apr-23
6-May-23
30-May-23
23-Jun-23

Date
Number
of Bids
Received
Value of Bids
Received
Amount
Allotted
Price per
Milligram
of Gold


ZWL


RBZ GOLD-BACKED
DIGITAL TOKENS ISSUE
NO. 4/2023
01-Jun-23

4,516,617,361
4,516,617,361
207,79
RBZ GOLD-BACKED
DIGITAL TOKENS ISSUE
NO. 5/2023
08-Jun-23

7,214,378,573
7,214,378,573
388,01
RBZ GOLD-BACKED
DIGITAL TOKENS ISSUE
NO. 6/2023
16-Jun-23

3,089,515,828
3,089,515,828
473,87
RBZ GOLD-BACKED
DIGITAL TOKENS ISSUE
NO. 7/2023
23-Jun-23

3,513,066,006
3,513,066,006
489.15
Total ZWL

48,974,085,482
48,974,085,482

critical household requirements, including consumption, education, medical, and investment
expenditures. At the country level remittances have become an important flow sustaining the
external position. The World Bank estimates that remittances to the low and middle-income
countries were US$630 billion in 2022, with inflows to Sub-Saharan Africa estimated at about
US$50 billion. The top recipient countries for remittances in the world, include India, Mexico,
China, the Philippines, Egypt, and Nigeria

Remittances to Zimbabwe have been trending upwards, steadily increasing from US$1.01 billion
in 2017 to reach US$1.97 billion 2022, in line with the country’s increasing diaspora. The
remittances have been an important source of income, which has contributed towards the
sustenance of aggregate demand and economic activity. In 2020 when the global economy was
going through the covid-19 negative shocks on production and incomes, the country received
US$1.2 billion from the diaspora remittances, which supported economic performance at a time
COVID-19 had negative effect on production and incomes.

Figure 8: Remittances (US$ million)
Source: RBZ Calculations

The country has been running current account surpluses since 2019, anchored by strong
secondary income inflows, for which diaspora remittances are the main component. The diaspora
remittances have, therefore, been among the source of income offsetting the deficits on the
goods, services, and primary income accounts as shown in Figure 9. Thus, while the goods and
-


services trade balances and primary income had a total deficit of US$1.1 billion in 2020, the
balance on secondary income was US$1.8 billion resulting in a current account surplus of US$0.7
billion.


Figure 9: Current Account Developments (US$ millions)

Source: RBZ 2023

In terms of source countries, South Africa, which hosts the largest percentage of Zimbabweans
in the diaspora is the largest source country for the remittances accounting for 33% of total
remittances followed by the United Kingdom, accounting for 23% and the United States,
accounting for 11% of the remittances.

Figure 10: Remittances Source Countries
Source: RBZ


Balance on Goods
Balance on Services
Balance on Primary Income
Balance on Secondary Income
Current Account Bal
South Africa
33%
United Kingdom
23%
United States
11%
Australia
6%
Canada
2%
Botswana
2%
Other
23%

Government and the Reserve Bank are committed to implementing measures that enhance the
inflow of diaspora remittances through formal channels, including gradual liberalization of the
foreign currency market. In addition, the SADC central banks have dedicated a Strategic Focus
Area at the regional level to expand formal remittances through the reduction of the cost of
sending remittances through increasing digitalisation and the speed of transactions associated
with remittances by modernizing and harmonising the regional payments systems in the region.
Similarly, the United Nations through SDG 10 seeks to reduce the transaction costs of migrant
remittances to less than 3% by the year 2030. In the same spirit, the authorized dealers are
encouraged to complement the efforts in reducing the costs of sending and receiving remittances.


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
2-June-23 9-June-23 13-June-23 20-June-23
WHOLESALEFX
13-June-23 16-June-23 20-June-23
Total
Bids (US$ dollars)

Amount Allotted
(US$ dollars)

Highest Rate


7,350
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
2-June-23 9-June-23 16-June-23 23-June-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
13,483,681.07
4,158,013.57
2,945,406.28

1,135,542.46