Vol. 25 No. 40


Week Ending
6th October 2023
Weekly Economic
Highlights
TABLE OF CONTENTS


THE GROWING SIGNIFICANCE OF CARBON TRADING IN

1.
OVERVIEW

This report provides an analysis of the developments in the money and capital markets for the
week ending 6th October 2023. The report also covers developments in international commodity
prices and stock markets during the week. The last section of the report presents a brief on the
growing significance of carbon trading in Zimbabwe.


During the week under analysis, the Zimbabwe Stock Exchange (ZSE) was characterised by
positive trading, while the Victoria Falls Stock Exchange (VFEX) exhibited bearish sentiments.
The value of transactions processed through the National Payment Systems (NPS) registered a
decrease of 8.03% to ZW$5.34 trillion, during the reporting week.

The week under review saw minimum and maximum deposit rates for foreign currency deposits
remain largely unchanged. On international commodity markets, average prices for all selected
commodities declined, in large part, on the back of a strengthening U.S. dollar.


2.
INTEREST RATES

Local Currency (ZW$) Deposit Rates

During the week ending 6 October 2023, minimum and maximum ZW$ deposit rates for savings
deposits, 1-month, 6-month and 12-month tenors remained largely unchanged. However,
minimum deposit rates for deposits of 3-month tenor declined marginally.

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
(%)
08-Sep-23

15-Sep-23

22-Sep-23


29-Sep-23

6-Oct-23
34.29
35.60
59.00


Source: Reserve Bank of Zimbabwe, 2023

Local Currency (ZW$) Lending Rates

During the week under analysis, minimum ZW$ commercial bank lending rates for individual
clients decreased, while those for corporate clients increased. In the same week, maximum
lending rates for individual clients increased marginally, those for corporate clients lending rates
declined. The ZW$ lending rates are shown in Table 2.


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

Individual Clients

Corporate Clients
08-Sep-23

15-Sep-23

22-Sep-23

29-Sep-23

6-Oct-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

The reporting week saw minimum and maximum FCA deposit rates for savings deposits,
deposits of 3-month, 6-month and 12-month remain largely unchanged. However, maximum
deposit rates for deposits of 1-month tenor decreased during the same week. Average foreign
currency deposits rates 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
(%)
08-Sep-23

15-Sep-23

22-Sep-23

29-Sep-23


6-Oct-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Lending Rates


Minimum foreign currency lending rates for individual clients decreased, while those for
corporate clients registered a 0.45 percentage point increase, during the week under analysis. An
increase in foreign currency lending rates for individual clients was recorded, while for corporate
clients the maximum foreign currency lending rates were lower, during the week under analysis.

Table 4: Lending Rates (per annum)

Minimum (%)
Maximum (%)
Minimum (%)
Maximum (%)

Individual Clients
Corporate Clients

08-Sep-23

15-Sep-23

22-Sep-23

29-Sep-23

6-Oct-23

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

The aggregate value of transactions processed through the National Payment Systems stood at
ZW$5.34 trillion, during the week ending 6 October 2023, representing a decrease of 8.03%
from ZW5.81 trillion recorded in the previous week. The Real Time Gross Settlement (RTGS)
system accounted for 80.23% of the total value of transactions processed during the reporting
week, followed by Mobile, 6.13%; ATM, 6.86 and POS, 6.79%, as shown in Figure1.

Figure 1: Composition of NPS Transactions in Value Terms

Source: Reserve Bank of Zimbabwe, 2023


RTGS
80,23%
POS
6,79%
ATM
6,86%
MOBILE
6,13%
RTGS
POS
ATM
MOBILE

The volume of transactions processed through the NPS increased by 10.59% to close at 12.75
million, driven by increases in POS, ATM, and mobile transaction volumes. The NPS transaction
volumes were distributed as follows: Mobile, 78.05%; POS, 18.47%; ATM, 1.82%; and RTGS,
1.66%, 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
29 SEPTEMBER

WEEK ENDING
06 OCTOBER 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


RTGS; 1,66%
POS; 18,47%
ATM; 1,82%
MOBILE; 78,05%
RTGS
POS
ATM
MOBILE

4.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS


During the week ending 6th October 2023, international average prices for all selected
commodities decreased, underpinned by a strengthening U.S. dollar. Table 6 shows commodity
price developments, during the week under review.

Table 6: Metal and Crude Oil Prices for the week ending 6th October 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 (25 -
29 Sep)

2-Oct

3-Oct

4-Oct

5-Oct

6-Oct

Weekly Average (2 - 6
Oct)

Weekly Change (%)


Source: BBC, KITCO and Bloomberg 2023

Precious Metal and Lithium Prices Continue on a Downward Trend.
The prices for precious metals including palladium, gold, and platinum declined by 4.98%,
3.68% and 3.67%, respectively, during the week under analysis. In the same week, prices for
lithium registered a significant 6.66% decline. The price decreases were mainly driven by a
strengthening US dollar on the global market. Figure 3 shows the precious metal and lithium
price developments for the week ending 6th October 2023.

Figure 3: Weekly Precious Metals Price Developments (28th Sept. 2023 – 6th Oct. 2023)

Source: Kitco,2023

Source: Kitco,2023

28-Sep
29-Sep
30-Sep
1-Oct
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
US$/ounce
Gold
Gold
Linear (Gold)

28-Sep
29-Sep
30-Sep
1-Oct
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
US$/ounce
Platinum
Platinum
Linear (Platinum)

Source: Kitco,2023

Source: London Metal Exchange,2023


Base Metal and Brent Crude Oil Prices Remain Subdued.
International average prices for copper and nickel fell by 2.25% and 1.04%, respectively, during
the reporting week, while crude oil prices declined sharply by 6.39%, compared to the previous
week. Figure 4 shows daily commodity price developments for copper, nickel, and crude oil for
the period from 28th September 2023 to 6th October 2023.

Figure 4: Daily Commodity Price Developments for Copper, Nickel, and Brent Crude Oil

Source: London Metal Exchange,2023

28-Sep
29-Sep
30-Sep
1-Oct
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
US$/ounce
Palladium
Palladium
Linear (Palladium)

28-Sep
29-Sep
30-Sep
1-Oct
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
US$/tonne
Lithium Hydroxide
Lithium Hydroxide
Linear (Lithium Hydroxide)

28-Sep
29-Sep
30-Sep
1-Oct
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
US$/tonne
28-Sep
29-Sep
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
Copper

Copper
Copper
Linear (Copper)

Source: London Metal Exchange,2023

Source: BBC,2023


Exchange Rate Developments

Interbank Market
The Zimbabwe dollar (ZW$) depreciated by 5.18% on the interbank market, from an average of
ZW$5,302.45 per US$1 in the prior week to ZW$5,577.17 per US$1, during the week under
review, as shown in Table 2.


28-Sep
29-Sep
30-Sep
1-Oct
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
US$/tonne
28-Sep
29-Sep
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
Nickel

Nickel
Nickel
Linear (Nickel)

28-Sep
29-Sep
30-Sep
1-Oct
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
US$/barrel
28-Sep
29-Sep
2-Oct
3-Oct
4-Oct
5-Oct
6-Oct
Brent crude oil

Brent Crude Oil
Brent crude oil
Linear (Brent crude oil)

Table 2: Selected Exchange Rates (ZW$ per unit of foreign currency)

USD
ZAR
GBP
BWP
EURO
Weekly Average (25 - 29 Sep)

02-Oct

03-Oct

04-Oct

05-Oct

06-Oct

Weekly Average (2 - 6 Oct)

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

Source: Reserve Bank of Zimbabwe, 2023


5. EQUITY MARKETS

During the week ending 6th October 2023, the Zimbabwe Stock Exchange (ZSE) was
characterised by positively, while the Victoria Falls Stock Exchange (VFEX) exhibited bearish
sentiments. Resultantly, the ZSE All Share index rose by 3.69% to close at 131 311.22 points,
while the VFEX All Share index declined by 0.65% to close at 74.02 points.

Zimbabwe Stock Exchange (ZSE) Developments
The Top 10, Top 15 and Medium indices added 4.12%, 4.71% and 3.73% to close at 58 887.93
points, 80 300.17 points and 516 621.42 points, respectively. Demand for low-tier stocks
declined, resulting in the Small Cap index shedding 3.99% to close at 2 837 594.59 points.

Figure 5 shows developments on the ZSE’s All Share, Top 10 and Mining indices for the period
from 7th October 2022 to 6th October 2023.

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

Source: Zimbabwe Stock Exchange, 2023

The increase in the mainstream index emanated from share price gains for First Mutual Holdings
Limited (46.66%), CBZ Holdings Limited (33.95%), Nampak Zimbabwe Limited (30.00%),
Turnall Holdings Limited (17.73%) and NMBZ Holdings Limited (16.90%).

Partially offsetting the abovementioned gains were declines in the share prices of Dairibord
Holdings Limited (22.90%), General Beltings Holdings Limited (13.04%), Econet Wireless
Zimbabwe Limited (4.73%), First Mutual Properties Limited (3.96%) and British American
Tobacco Zimbabwe Limited (1.93%). The resource index remained unchanged at 125 531.67
points, during the week under review.

Market Turnover
During the week under review, the cumulative volume and value of shares traded on the ZSE
declined by 53.72% and 38.00% to 21.84 million shares and ZW$8,335.02 million, compared to
47.19 million shares and ZW$13,443.90 million recorded in the previous week, respectively.

Figure 4 shows the trend in daily market turnover for the period 7th October 2022 to 6th October
2023.


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
14-Jul-23
28-Jul-23
11-Aug-23
25-Aug-23
08-Sep-23
22-Sep-23
06-Oct-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
As a result of positive trading on the ZSE, the local bourse added 3.44%, or ZW$339.35 billion
worth of capitalization to close at ZW$10,212.85 billion, from ZW$9,873.49 billion recorded in
the week ending 29th September 2023.

Figure 5 shows the evolution of market capitalization for the period from 7th October 2022 to 6th
October 2023.

Figure 5: Market Capitalization

Source: Zimbabwe Stock Exchange, 2023


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
14-Jul-23
28-Jul-23
11-Aug-23
25-Aug-23
08-Sep-23
22-Sep-23
06-Oct-23
ZW$ (Million)
Negotiated Deal: 241 million
First Mutual Holdings
Limited shares exchanged
hands at ZW$196/share


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
14-Jul-23
28-Jul-23
11-Aug-23
25-Aug-23
08-Sep-23
22-Sep-23
06-Oct-23
$ Billions

Victoria Falls Stock Exchange (VFEX) Developments

The VFEX mainstream index declined by 0.65%, following share price losses for Axia
Corporation Limited (11.76%), Innscor Africa Limited (7.87%) and Zimplow Holdings Limited
(0.27%). Partially offsetting the losses were gains in the share prices of Bindura Nickel
Corporation (BNC) (20.18%), African Sun Limited (11.11%), National Foods Holdings Limited
(8.56%) and First Capital Bank Limited (1.02%).

VFEX Market Turnover
During the week under review, the cumulative volume and value of shares traded on the VFEX
declined by 50.40% and 18.28% to 1.13 million shares and US$0.38 million, respectively.

VFEX Market Capitalization
Owing to the bearish sentiments on the VFEX bourse during the week under review, the market
lost 0.65% worth of capitalization to close at US$1.27 billion, compared to US$1.27 billion
recorded in the previous week.

Figure 6 shows the trend in the VFEX All Share Index (ASI) for the period 7th October 2022 to
6th October 2023.

Figure 6: VFEX All Share Index

Source: Victoria Falls Stock Exchange (VFEX), 2023

6. THE GROWING SIGNIFICANCE OF CARBON TRADING IN ZIMBABWE

The global discourse surrounding climate finance, sustainable energy, and achieving net-zero
emissions has intensified, with trillions of dollars being allocated towards these initiatives
worldwide. Central to this effort is the practice of carbon trading, whereby companies and entities
engage in the buying and selling of carbon credits to regulate their carbon dioxide and greenhouse
gas emissions. This mechanism authorized by governments, aims to gradually reduce overall
carbon emissions, and mitigate their impact on climate change. Carbon trading enables
individuals and organizations to offset their emissions by investing in projects that reduce
emissions elsewhere, such as reforestation, renewable energy and enhanced energy efficiency.

The voluntary carbon-offset market has experienced remarkable growth, with its value projected
to surge from $2 billion in 2020 to an estimated $250 billion by 2050. Africa has emerged as a
significant player in the global carbon market, accounting for 13% of the total carbon credit
production in 2022. Notably, Zimbabwe stands out as a leading country in Africa for carbon
trading, generating 4.2 million credits from 30 registered projects in 2022.

Recognizing the potential of carbon trading, the Zimbabwean government has demonstrated a
strong commitment to expanding the country's carbon trading industry. In August 2023,
Zimbabwe launched Statutory Instrument 150 of 2023 on carbon credits trading regulations. The
new carbon market policy stipulates that 30% of all carbon project revenue should be allocated
to the government, while 70% would be retained by foreign investors, and at least 25% of the
70% foreign investor’s share should benefit local communities. This policy aims to combat
greenwashing and ensure equitable sharing of the benefits derived from carbon trading.

The development of carbon trading in Zimbabwe has potential benefits which include reduced
greenhouse gas emissions, increased investment in renewable energy, improved energy
efficiency and job creation. With its abundant natural resources and a proactive government,
Zimbabwe is uniquely positioned to benefit from the development of carbon trading. By
capitalizing on the opportunities and addressing the associated challenges, Zimbabwe can
establish itself as a prominent player in the global carbon market, contributing to a more
sustainable future for the continent.

An important milestone in Zimbabwe's carbon trading journey is the recent launch of the Victoria
Falls Carbon Exchange (VFCX) in August 2023. The VFCX, located in Victoria Falls partnered
with Carbon Trade Exchanges with the quest to serve as a pan-African platform for trading
carbon credits from projects across the continent. The VFCX is committed to supporting the
development of the African carbon market and ensuring equitable distribution of the benefits of
carbon trading. The establishment of the Victoria Falls Carbon Exchange marks a significant
advancement for the African carbon market, promising reduced greenhouse gas emissions,
sustainable development, and a more secure future for Africa.

The carbon trading initiatives are likely to assist the country unlock the immense potential arising
from climate financing strategies. The on-going research on carbon trading is noble and will play
a pivotal role in shaping the continent's sustainable development trajectory.

`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.


12-Sep-23
WHOLESALE FX


19-Sep-23


26-Sep-23


03-Oct-23
Total
Bids (US$ dollars)

18,726,643.25

19,232,100.00

18,893,948.0

18,682,426.00
Amount Allotted (US$
dollars)

19,610,040.40


18,250,000.00

18,693,948.80

18,682,426
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


12-Sep-23

19-Sep-23

26-Sep-23

03-Oct-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
1,161,863.98
713,950.34
1,123,944.44
1,202,872.38