Vol. 25 No. 31


Week Ending
4th August 2023
Weekly Economic
Highlights
TABLE OF CONTENTS


RECENT DEVELOPMENTS IN INTERNATIONAL AND

1.
OVERVIEW

This report provides an analysis of the developments in the money and capital markets for the
week ending 4th August 2023. The report also covers developments in the tobacco, mineral
commodities, and stock markets during the week. The last section of the report presents a review
on recent developments in international and domestic oil prices


The Zimbabwe Stock Exchange (ZSE) rebounded from previous week’s loss while the Victoria
Falls Stock Exchange (VEFX) exhibited bearish sentiments during the week under review. The
value of transactions processed through the National Payment System (NPS) were lower during
the week under analysis compared to the previous week, largely reflecting decreases in RTGS
transaction values.


The deposit rates for the domestic currency deposits remained largely unchanged except for
changes in minimum deposit rates for deposits of 3 months and 12 month tenor as well as
maximum deposit rates for savings deposits and deposits of 3 month tenor. Minimum foreign
currency deposits (FCA) for savings deposits were lower while maximum deposit rates for
deposits of 12-month tenor registered a marginal increase during the week under analysis. Local
currency lending rates declined, while foreign currency lending rates for both individuals and
commercial clients increased marginally during the week ending 4th August 2023.


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 under analysis, minimum ZWL deposit rates for savings deposits, deposits of
1-month and 6-month tenor remained largely unchanged. Minimum deposit rates for deposits of
3 month tenor registered a decline, while those for 12 month tenor increased. Maximum deposit
rates for savings deposits and deposits of 3 month tenor were higher during the week of analysis,
as banks continued to encourage deposits for credit creation. Maximum deposit rates for deposits
of 1 month, 6 month and 12 month tenor remained at previous week’s levels during the same

period. Commercial banks continued to offer high deposit rates for short and long term deposits
as part of measures aimed at attracting deposits for onward lending to individuals and corporates
amid prevailing tight liquidity conditions in the market.

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
(%)
14-Jul-23

21-Jul-23


28-Jul-23

04-Aug-23


Source: Reserve Bank of Zimbabwe, 2023


Local Currency Lending Rates

The minimum and maximum ZWL lending rates for both corporate and individual clients
decreased marginally during the period of analysis. The downward adjustments in maximum
lending rates for corporates witnessed during the last 1 month is expected to boost borrowing by
individuals and firms. The ZWL lending rates are shown in Table 2.

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

Individual Clients

Corporate Clients
7-July-23

14-July-23

21-Jul-23

28-Jul-23

04-Aug-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

Minimum deposits rates for deposits of 1-month and 6-month and savings deposit rates remained
unchanged during the week ending 4th August 2023. The week under analysis saw minimum
deposit rates of 3 month tenor register a decline while deposit rates for 12 month tenor increased.
The maximum deposits rates for all classes declined save for savings deposits and deposits of 12

month tenor that registered declines during the week under review. Average foreign currency
deposits rates for all tenors 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
(%)
14-July-23

21-July-23

28-July-23

04-Aug-23

Source: Reserve Bank of Zimbabwe, 2023


Foreign Currency (USD) Lending Rates


Minimum and maximum foreign currency lending rates for individual clients remained
unchanged while minimum and maximum foreign currency lending rates for corporate clients
increased marginally during the week under analysis. The continued reduction in foreign
currency lending rates for corporate clients is a positive development as it encourages borrowing
to boost production in the economy.
Table 4: Foreign Currency Lending Rates (per annum)
Date
Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)

Individual Clients

Corporate Clients
30-Jun-23

7-July-23

14-July-23

21-Jul-23

28-Jul-23

04-Aug-23

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

During the week ending 4th August 2023, aggregate transactions processed in value terms
through the National Payment Systems platforms was ZW$4.44 trillion, representing a decrease
of 1.74% from the previous week. This was partly attributed to a decline in lower Real Time

Gross Settlement System (RTGS) transactions amid a high demand for the local currency in the
economy in the back of tight liquidity conditions. The RTGS system constituted 81.62% of the
total value of National Payment System Transactions during the period under review. 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


During the week under analysis, the volume of transactions processed through the NPS
increased by 10.43% to close at 11.00 million supported by increases in POS and Mobile
transaction volumes. This reflected increases in ATM transaction volumes. NPS transaction
volumes were distributed as follows: Mobile, 75.16%; POS, 21.17%; ATM, 1.92%; and RTGS,
1.76%, shown in Figure 2.

Figure 2: Composition of NPS Transactions in Volume Terms

Source: Reserve Bank of Zimbabwe, 2023


RTGS
81.62%
POS
6.71%
ATM
5.55%
MOBILE
6.12%
RTGS
POS
ATM
MOBILE
RTGS, 1.76%
POS, 21.17%
ATM, 1.92%
MOBILE, 75.16%
RTGS
POS
ATM
MOBILE

Table 5: National Payment Systems Activity
PAYMENT
STREAM
WEEK ENDING
28 July 2023
WEEK ENDING

04 August 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
During the week ending 04th of August 2023, or the 102nd day of the tobacco selling season, a
cumulative total of 294.74 million kilograms of tobacco had been sold, compared to a cumulative
total of 204.72 million kilograms sold during the same period in 2022. The turnover realized
from the sales amounted to US$892.95 million, a 42.53% increase, compared to US$626.51
million realized during the same period in 2022.

Table 6: Weekly Cumulative Tobacco Sales: Day 102nd (04th August 2023)

Variance (%)
Cumulative Quantity Sold (million
kgs)
204,715,987
294,743,679
43,98
Average Price (US$/kg)
3.06
3.03
-1.01
Cumulative value (US$ million)
626,506,638
892,954,154
42.53
Source: Tobacco Industry and Marketing Board (TIMB), 2023

The golden leaf was sold at a lower average price of US$3.03/kg, during the week under analysis,
down from US$3.06/kg realized during the same period in 2022.
5.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS

During the week ending 4 August 2023, average prices for gold, platinum, palladium and nickel
declined, whilst copper and crude oil prices increased. Table 7 shows developments in prices for
selected commodities, during the week under review.

Table 7: Metals and Crude Oil Prices: Week ending 04th August 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil

US$/ounc
e
US$/ounc
e
US$/ounce
US$/tonne
US$/tonne
US$/barrel
Weekly Average
(24- 28 July)

31-July

1-Aug

2-Aug

3-Aug

4-Aug

Weekly Average
(31 July- 04
August)

Weekly Change

Source: BBC, KITCO and Bloomberg 2023

Gold

Gold prices continued a negative trajectory, decreasing by 0.70%, from a weekly average of
US$1,960.98 per ounce in the previous week to close the week under review at US$1,947.31.
Prices declined after strong U.S. private payroll data fuelled bets of more monetary policy
tightening and boosted the U.S. dollar and Treasury yields.

Platinum
Platinum prices retreated by 3.23%, from a weekly average of US$959.80 per ounce in the
previous week to US$928.80 per ounce, during the week under analysis. Prices declined as the
U.S. dollar strengthened, following weak demand in the automotive industry.
Palladium
During the week ending 4th August, palladium prices decreased by 1.26% to US$1,252.10 per
ounce, from US$1,268.10 per ounce reported in the previous week. The fall was due to a
strengthening US dollar against major currencies.

Copper
Copper prices slightly rose by 0.01%, from an average of US$8,619.30 per tonne in the previous
week to US$8,620.50 per tonne, during the week ending 4th August 2023. Red metal prices rose
amid continued supply constraints and labour disputes in major copper-producing regions.

Nickel
Nickel prices slipped by 0.32%, from US$21,836.00 per tonne in the prior week to US$21,766.00
per tonne, during the week under review. Prices declined amid expectations of an increased
supply of nickel plates from Chinese stainless steel.
Brent Crude Oil
The weekly average price of Brent Crude oil increased by 1.84%, from US$83.51 per barrel in
the week ending 28th July 2023 to US$85.05 per barrel, during the week under analysis. Prices
increased following expectations of a supply reduction by top producers Saudi Arabia and
Russia. The supply deficiency is forecasted to continue throughout the month of September 2023.


Exchange Rate Developments

Interbank Market
The Zimbabwe dollar (ZW$) depreciated by 0.4% on the interbank market, from an average of
ZW$4,514.33 per US$1 in the previous week to ZW$4,532.38 per US$, 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
(24-28
July)

31-July

1-Aug

2-Aug

3-Aug

4-Aug

Weekly Average (31 July04th August)

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

Source: Reserve Bank of Zimbabwe, 2023

6. EQUITY MARKETS


During the week ending 04th August 2023, the Zimbabwe Stock Exchange (ZSE) rebounded
from previous week’s loss while the Victoria Falls Stock Exchange (VFEX) exhibited bearish
sentiments for the 12th consecutive week. As such, the ZSE All Share Index added 4.92% while
the VFEX All Share index lost 1.27% to close at 122 498.00 points and 68.29 points,
respectively.

Zimbabwe Stock Exchange (ZSE) Developments

Small cap, Top 10 and Top 15 indices increased by 5.55%, 9.20% and 6.21% to 2 293 825.24,
57 773.36 and 78 721.18 points respectively. The resource index remained unchanged to close
the week at 89 512.59 points. Figure 3 shows developments on the ZSE’s All Share, Top 10 and
Mining indices from 05th August 2022 to 04th August 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 Delta Corporation
Limited (21.63%), Dairiboard Holdings Limited (19.07%), OK Zimbabwe Limited (15.93%),
CBZ Holdings Limited (11.88%) and Truworths Limited (11.73%).


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
21-Jul-23
04-Aug-23
Mining Index
All Share and Top 10 Indices
All Share Index (ZSE)
Top 10 Index
Mining Index

Partially offsetting the aforementioned gains were declines in the share prices of Ariston
Holdings Limited (15.62%), Nampack Zimbabwe Limited (15.00%), TSL Limited (14.61%),
Turnall Holdings Limited LAS (10.30%) and SeedCo Limited (9.59%).

Market Turnover
During the week under review, trading activity was concentrated in some selected wealth
preserving blue-chip counters, albeit on low volumes. As such, the cumulative value of shares
traded increased by 6.06% ZW$10 217.33 million, despite a decline of 39.21% in volume of
shares traded, amounting to 15.11 million shares.

Figure 4 shows the trend in daily market turnover for the period 05th August 2022 to 04th August
2023.

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


Market Capitalisation
Owing to improved trading activity on the ZSE during the week under analysis, the market
gained 2.79%, or ZW$260.12 billion worth of capitalization to close at ZW$9 588.99 billion,
compared to ZW$9 328.87 billion registered in the previous week. Figure 5 shows the evolution
of market capitalization for the period 05th August 2022 to 04th August 2023.


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
21-Jul-23
04-Aug-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 was a result of share price decline in Zimplow
Holdings Limited (13.04%), Innscor African Limited (8.33%), Bindura Nickel Corporation
Limited (BNC) (7.80%), Axia Corporation Limited (2.49%) and Africa Sun Limited (1.48%).
Partially offsetting the abovementioned declines were increases in the share prices of Padenga
Holdings Limited (6.71%) and Simbisa Brands Limited (2.07%).

VFEX Market Turnover
The VFEX cumulative volume and value of shares traded added 95.79% and 67.84% to 2.73
million shares and US$0.63 million, compared to 1.39 million shares and US$0.37 million,
recorded in the previous week, respectively.

VFEX Market Capitalization
Reflecting the bearish sentiments exhibited on the VFEX during the week under analysis, the
market lost 1.26% worth of capitalization to close at US$1.17 billion, compared to US$1.18
billion registered in the previous week. Figure 6 shows the trend in the VFEX All Share Index
for the period 05th August 2022 to 04th August 2023


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
21-Jul-23
04-Aug-23
$ Billions

Figure 6: VFEX All Share Index
Source: Victoria Falls Stock Exchange (VFEX), 2023

7.
RECENT DEVELOPMENTS IN INTERNATIONAL AND DOMESTIC OIL PRICES

International oil prices have been on a rising trend since the end of June 2023. The increase has
been on account of firm demand particularly from China the world’s largest oil importer amid
indications about an increase in economic activity in the Asian Giant and positive global
economic outlook. Oil production cuts by the Organisation of Petroleum Exporting Countries
and its allies (OPEC+) on the back of record oil demand continue to support the prices.
Geopolitical tensions between Russia and Ukraine also continue to disrupt oil supplies. In
addition, the decline in oil inventories since July 2023 also contributed to the increase in prices.
Resultantly, international oil prices have been averaging US$80.00 per barrel since mid-July
2023. The extension of global oil market tightening in the short term is expected to keep prices
higher. Figure 7 below shows the developments in international oil prices from 25th June 2023
to 4th August 2023.

Figure 7: International Crude Oil Prices


Source: BBC

On the domestic front fuel, prices have also been increasing since the end of June 2023
attributable to increases in the international oil prices. Petrol prices increased from US$1.55
dollars to US$1.57 dollars by 4 August 2023. Similarly, diesel prices also increased from
US$1.56 dollars to US$1.58 dollars during the same period. The firming of fuel prices is
likely to continue pilling pressure on domestic inflation since fuel constitute 4.1% of the
domestic Consumer Price Index (CPI) basket. Figure 2 below presents the recent
developments in petrol and diesel prices from 25th June 2023 to 4th August 2023.


25-Jun-23
30-Jun-23
5-Jul-23
10-Jul-23
15-Jul-23
20-Jul-23
25-Jul-23
30-Jul-23
4-Aug-23
International Crude Oil Price

Figure 8: Domestic Fuel Prices US$ dollars

Source: ZERA


RESERVE BANK OF ZIMBABWE

25-Jun-23
27-Jun-23
29-Jun-23
1-Jul-23
3-Jul-23
5-Jul-23
7-Jul-23
9-Jul-23
11-Jul-23
13-Jul-23
15-Jul-23
17-Jul-23
19-Jul-23
21-Jul-23
23-Jul-23
25-Jul-23
27-Jul-23
29-Jul-23
31-Jul-23
2-Aug-23
4-Aug-23
PETROL
DIESEL

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.


WHOLESALEFX
25-July-23 27- July-23 01-Aug-23 03-Aug-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
11-July-23 18-July-23 25-July-23 01-Aug-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
580,921.57
460,130.60
601,650.01
497,893.08