Vol. 25 No. 38


Week Ending
22nd September 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 22nd September 2023. The report also covers developments in mineral commodities
and stock markets during the week. The last section of the report presents a brief on monetary
policy and climate change risks.


Subsequently, the Zimbabwe Stock Exchange (ZSE) traded negatively while the Victoria Falls
Stock Exchange (VFEX) exhibited bullish sentiments. The value of transactions processed
through the National Payment System (NPS) registered a decline during the week under analysis
compared to the previous week.

The minimum and maximum deposit rates for both the domestic currency deposits and foreign
currency deposits remained largely unchanged during the week under review. Conclusively, on
the international front, commodity prices for gold, platinum, palladium, crude oil increased while
prices for copper, nickel and lithium retreated.


2.
INTEREST RATES

Local Currency (ZWL) Deposit Rates

During the week ending 22nd September 2023, minimum and maximum ZWL deposit rates for
of 1-month, 6-month and 12-month tenors remained largely unchanged. Minimum deposit rates
for savings deposits and deposits of 3-month tenor registered an increase. Maximum deposit rates
for savings deposits were higher while those for deposits of 3-month tenor were lower during the
week under analysis.
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
(%)
25-Aug-23


01-Sep-23

08-Sep-23

15-Sep-23

22-Sep-23

Source: Reserve Bank of Zimbabwe, 2023

Local Currency Lending Rates

The minimum ZWL lending rates for individual clients decreased while maximum ZWL lending
rates for individual clients increased during the week under analysis. Minimum and maximum
ZWL lending rates for corporate clients registered increases during week under review. The
ZWL lending rates are shown in Table 2.


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

Individual Clients

Corporate Clients
18-Aug-23

25-Aug-23

01-Sep-23

08-Sep-23

15-Sep-23

22-Sep-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

During the week under review, minimum and maximum FCA deposit rates for all classes of
deposits remained largely unchanged. Average foreign currency deposits rates are shown in
Table 3. Banks continue to offer higher deposit rates for deposits of longer tenor in order to
attract deposits of onward lending to the productive sectors.

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
(%)
25-Aug-23

01-Sep-23

08-Sep-23

15-Sep-23

22-Sep-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Lending Rates


Minimum foreign currency lending rates for individuals decreased while the maximum lending
rates increased during the week under analysis ending. Minimum and maximum foreign currency
lending rates for corporate clients were higher during the week under analysis.

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

Individual Clients
Corporate Clients

25-Aug-23

01-Sep-23

08-Sep-23

15-Sep-23

22-Sep-23

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

The total value of transactions processed through NPS platforms amounted to ZW$5.01 trillion,
representing a decrease of 1.94% from ZW$5.11 trillion in the previous week. Real Time Gross
Settlement (RTGS) system transactions constituted 84.42% of the total value of transactions
processed through the NPS. In value terms, NPS transactions were distributed as shown in
Figure1.

Figure 1: Composition of NPS Transactions in Value Terms

Source: Reserve Bank of Zimbabwe, 2023


RTGS
84.42%
POS
7.62%
ATM
3.79%
MOBILE
4.17%
RTGS
POS
ATM
MOBILE

The volume of transactions processed through the NPS increased by 5.13% to close at 10.55
million driven by increases in RTGS and POS transactions volumes. NPS transaction volumes
were distributed as follows: Mobile, 73.50%; POS, 23.11%; ATM, 1.46%; and RTGS, 1.93%,
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
15 September 2023
WEEK ENDING
22 September 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, 1.93%
POS, 23.11%
ATM, 1.46%
MOBILE, 73.50%
RTGS
POS
ATM
MOBILE

4.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS


During the week of analysis, international commodity prices for gold, platinum, palladium and
crude oil increased, while prices for copper, nickel and lithium retreated. Table 7 shows
commodity price developments during the week under analysis.

Table 7: Metal and Crude Oil Prices for the week ending 22nd September 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
(11 - 15 Sep)

18-Sep

19-Sep

20-Sep

21-Sep

22-Sep

Weekly Average
(18 - 22 Sep)

Weekly Change (%)

Source: BBC, KITCO and Bloomberg 2023

Gold

Gold prices increased by 0.66%, from an average of US$1,915.96 per ounce reported in the
previous week to US$1,928.53 per ounce during the week under review. The metal price surged
as markets continued experiencing uncertainty regarding the timing of the U.S. Federal Reserve’s
decision to hike rates.

Platinum
The week under review saw platinum prices increasing by 3.20%, from US$906.40 per ounce
reported in the previous week to US$935.40 per ounce. The price rise was underpinned by
increased demand for the precious metal supported by stronger-than-expected economic growth
from China.

Palladium
During the week ending 22nd September 2023, palladium prices rose by 2.12% to US$1,263.30
per ounce, from US$1,237.10 per ounce recorded in the previous week. The price rise was
supported by increased demand for the metal and the stronger-than-expected economic reports
from China.

Copper
During the week ending 22nd September 2023, copper prices decreased by 1.82% to US$8,263.60
per tonne from US$8,416.40 per tonne recorded in the prior week. The price of the red metal fell
amid the strong U.S. dollar, high inventories and reduced risk appetite after the U.S. Federal
Reserve signalled that the monetary policy would remain restrictive for longer.


Nickel
Nickel prices continued the negative momentum, decreasing by 2.82% to close at US$19,516.60
per tonne during the week under review, from US$20,083.00 per tonne reported in the previous
week. Weak demand prospects from China, the world’s largest metal consumer, pulled prices
back.

Lithium
Lithium prices reduced by 2.86%, from US$28,680.00 per tonne reported in the previous week
to US$27,860.00 per tonne during the under-analysis week. Price declined amid weakened
demand for battery electrolytes and battery cells.

Brent Crude Oil
Crude oil prices increased by 0.87%, from US$92.85 per barrel recorded in the previous week to
US$93.65 per barrel during the week ending 22nd September 2023. Tight global supplies from
OPEC+ members largely influenced the increase in oil prices.

Exchange Rate Developments
Interbank Market
The Zimbabwe dollar (ZW$) depreciated by 6.82% on the interbank market, from an average of
ZW$4,723.22 per US$1 in the prior week to ZW$5,045.50 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 (11 - 15 Sep)

18-Sep

19-Sep

20-Sep

21-Sep

22-Sep

Weekly Average (18 - 22 Sep)

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

Source: Reserve Bank of Zimbabwe, 2023


5. EQUITY MARKETS

During the week ending 22nd September 2023, the Zimbabwe Stock Exchange (ZSE) traded
negatively, and the Victoria Falls Stock Exchange (VFEX) exhibited bullish sentiments.
Resultantly, the ZSE All Share index lost 19,37% while the VFEX All Share index gained by
2.31% to close at 115 490.04 points and 72.43 points, respectively.

Zimbabwe Stock Exchange (ZSE) Developments

The Top 10, Top 15 and Small Cap indices lost by 29.59%, 25.48% and 2.77% to close at 48
853.49 points, 69 366.31 points and 2 282 585.59 points, compared to previous week’s positions
of 69 387.77 points, 93 084.44 points and 2 347 578.77 points, respectively.

The resource index remained unchanged at 125 531.67 points during the week under review.
Figure 3 shows developments on the ZSE’s All Share, Top 10 and Mining indices from 7th
October 2022 to 22nd September 2023.

Figure 3: ZSE All Share, Top 10 and Mining Indices

Source: Zimbabwe Stock Exchange, 2023


The decline in the mainstream index was a result of share price losses in Ecocash Holdings LAS
(82.68%), SeedCo Limited (44.33%), Delta Corporation Limited (41.98%), CBZ Holdings
Limited (33.77%) and Tanganda Tea Limited (25.43%).

Increases were registered in share prices for Turnall Holdings Limited (17.65%), NMBZ
Holdings Limited (15.43%), Unifreight Africa Limited (15.00%), National Trye Service Limited
(14.88%) and First Mutual Properties Limited (11.20%).

Market Turnover

During the week under analysis, cumulative volume and value of shares traded declined by
23.99% and 37.09% to 20.60 million shares and ZW$9,310.74 million, respectively. This
compares to 27.10 million shares and ZW$14,799.88 million recorded in the prior week,
respectively.

Figure 4 shows the trend in daily market turnover for the period 16th September 2022 to 15th
September 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
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 Capitalization

Due to the subdued trading activity on the ZSE during the week under review, the market lost
20.92%, or ZW$2,387.01 billion worth of capitalization to close at ZW$9,022.01 billion,
compared to ZW$11,409.03 billion registered in the previous week.


Figure 5 shows the evolution of market capitalization for the period 23rd September 2022 to 22nd
September 2023.

Figure 5: Market Capitalization
Source: Zimbabwe Stock Exchange, 2023


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
14-Jul-23
28-Jul-23
11-Aug-23
25-Aug-23
08-Sep-23
22-Sep-23
(ZW$ (Million)
Negotiated Deal: 241 million
First Mutual Holdings
Limited shares exchanged


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

Victoria Falls Stock Exchange (VFEX) Developments

The increase in the VFEX mainstream index was a result of share price gains in First Capital
Bank Limited (36.32%), Caledonia Mining Corporation (20.00%), African Sun Limited
(14.00%), Innscor Africa Limited (5.38%), Simbisa Brands Limited (3.66%) and Axia
Corporation Limited (0.50%).

Partially offsetting the aforementioned gains were losses in the share prices of National Foods
Holdings Limited (17.44%), Padenga Holdings Limited (0.28%) and Seed Co International
(0.21%).

VFEX Market Turnover

The VFEX cumulative volume and value of shares traded declined by 1.21% and 13.09% to 5.63
million shares and US$0.36 million compared to 5.70 million shares and US$0.42 million,
recorded in the previous week, respectively.

VFEX Market Capitalization

Due to increased investor appetite on the VFEX during the week under review, the market added
2.32% worth of capitalization to close at US$1.24 billion compared to US$1.21 billion recorded
in the prior week.

Figure 6 shows the trend in the VFEX All Share Index (ASI) for the period 23rd September 2022
to 22nd September 2023.

Figure 6: VFEX All Share Index

Source: Victoria Falls Stock Exchange (VFEX), 2023

6. MONETARY POLICY AND CLIMATE CHANGE RISKS

There is wide consensus among policy makers and central banks the world over that natural
disasters such as adverse climate change and disease pandemics have far reaching negative
effects on financial sector development and stability through their adverse impacts on economic
growth, terms of trade, inflation, and production competitiveness. The catastrophes directly or
indirectly interfere with the smooth transmission of monetary policy. During the covid-19
pandemic, for example, it became harder to quantify the risk of going to work or conducting
business, let alone the treatment of the pandemic. Thus, the pandemic had lasting impact on
business and business methods, including banks’ risk perceptions, management, and balance
sheets, with adverse effects on credit, economic performance, and policy transmission. Similar
disruptions on global capital flows and production supply chains are deducible from the effects
of the current war in Ukraine and the risks around the devastating effects of climate change.

Zimbabwe, like many other countries in the developing world is susceptible to the effects of
climate change. The country has a long history of droughts which, when augmented and
compounded by other shocks lead to disturbances on macroeconomic stability, including price
and exchange rate stability with potential spillover effects on the financial sector. As such there

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
14-Jul-23
28-Jul-23
11-Aug-23
25-Aug-23
08-Sep-23
22-Sep-23

is greater need to understand and monitor climate related risks that may negatively impact on
inflation stability, soundness of the financial system and effectiveness of policy transmission.

Figure 7: Climate Change Transmission Channels
Source: International Monetary Fund, (2019)

Figure 7 shows the climate change transmission channels, which occur through at least two
transmission ways which stem from the physical risks and transition risks. The physical risks
incorporate infrastructural and property damages whilst transition risks are inclusive of climate
policy and changes to consumer preferences. This in turn results in economic disruptions which
encompass asset losses, credit losses and reconstruction costs.

Zimbabwe recently experienced the negative effects of climate change when Cyclone Idai hit the
country in March 2019. The cyclone was characterized by widespread floods and strong winds,
which is evident of climate change. Cyclone Idai caused substantial damage to infrastructure and
loss of livelihoods particularly in the Eastern parts of the country. This in turn had a detrimental
effect on the economy as there were disruptions in economic activities. The agricultural sector
was affected through the destruction of livestock and crops leading to spillover effects on
agricultural output and food security. Consequently, the slowdown in agricultural activities
weighed down overall economic growth compounding with other factors leading to higher
inflationary pressures in the economy in 2019.

Turning to recent climate change events, the World Meteorological Organization (WMO) has
predicted that the probability of the occurrence of El Nino phenomenon is high in the Southern
parts of Africa including Zimbabwe. The El Nino is typically characterised by above normal
temperatures in the eastern and central Pacific Ocean tropical area. The consequences of El Nino
particularly in the southern parts of Zimbabwe are drought conditions that are likely to affect
water supply for human, livestock and industrial consumption. This can potentially dent the
country’s economic growth prospects and lead to elevated prices particularly food prices.

Notably, the Government has been proactive in dam construction and rehabilitation projects to
waterproof agriculture, as part of measures to mitigate against the negative effects of climate
change shocks emanating from droughts. The Bank on its part will continue to actively monitor
climate change risks with the view of implementing appropriate monetary policy measures that
dampen the burden on economic agents during hard times induced by climate change.


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.


16-August-23
WHOLESALFX
29- Aug-23

12-Sep-23

19-Sep-23
Total
Bids (US$ dollars)
18,854,776.00
19,610,040.40

18,726,643.25

19,232,100.00
Amount Allotted (US$ dollars)
18,854,776.00
19,610,040.40

19,610,040.40


18,250,000.00
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


16-Aug-23

29-Aug-23

12-Sep-23

19-Sep-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
569,439.28
545,877.82
1,161,863.98
713,950.34