Vol. 25 No. 39


Week Ending
29th September 2023
Weekly Economic
Highlights
TABLE OF CONTENTS


IMPACT OF CLIMATE CHANGE ON ECONOMIC

1.
OVERVIEW

This report provides an analysis of the developments in the money and capital markets for the
week ending 29th 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 the impact
of climate change on economic performance.


The Zimbabwe Stock Exchange (ZSE) recovered from the previous week losses, while bullish
sentiments persisted on the Victoria Falls Stock Exchange (VFEX). An increase in the value of
transactions processed through the National Payment System (NPS) was recorded during the
week under analysis, compared to the previous week.

The minimum and maximum deposit rates for foreign currency deposits remained largely
unchanged, during the week under review. On international commodity markets, the prices for
all selected commodities decreased, mainly underpinned by the strengthening of the U.S. dollar.


2.
INTEREST RATES

Local Currency (ZWL) Deposit Rates

During the week ending 29th September 2023, minimum and maximum ZWL deposit rates for
deposits of 6-month and 12-month tenors remained largely unchanged. However, minimum and
maximum deposit rates for savings deposits registered a decrease.

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
(%)
01-Sep-23

08-Sep-23

15-Sep-23

22-Sep-23


29-Sep-23

Source: Reserve Bank of Zimbabwe, 2023

Local Currency Lending Rates

The minimum ZWL lending rates for individual clients decreased, while maximum lending rates
for the same category of clients increased slightly, during the week under analysis. Minimum
lending rates for corporate clients registered a marginal increase, while maximum lending rates
declined in the 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
01-Sep-23

08-Sep-23

15-Sep-23

22-Sep-23

29-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. Banks continued to offer higher deposit rates for deposits
of longer tenor to attract deposits for onward lending to the productive sectors. The average
foreign currency deposit 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
(%)
01-Sep-23

08-Sep-23

15-Sep-23

22-Sep-23

29-Sep-23


Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Lending Rates


Minimum foreign currency lending rates for individual clients marginally increased, while
maximum lending rates decreased, during the week under analysis. In the same week, minimum
foreign currency lending rates for corporate clients declined, while maximum lending rates
increased.

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

Individual Clients
Corporate Clients

01-Sep-23

08-Sep-23

15-Sep-23

22-Sep-23

29-Sep-23

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

The total value of transactions processed through the National Payment Systems (NPS)
amounted to ZW$5.81 trillion, representing an increase of 16.04%, from ZW$5.01 trillion in the
previous week. Real Time Gross Settlement (RTGS) transactions constituted 85.03% of the total
value of transactions processed through the NPS. In value terms, the NPS transactions were
distributed as shown in Figure1.

Figure 1: Composition of NPS Transactions in Value Terms

Source: Reserve Bank of Zimbabwe, 2023


RTGS
85,03%
POS
5,40%
ATM
4,81%
MOBILE
4,75%
RTGS
POS
ATM
MOBILE

The volume of transactions processed through the NPS increased by 9.27% to close at 11.53
million, driven by increases in RTGS, ATM and Mobile transaction volumes. NPS transaction
volumes were distributed as follows: Mobile, 77.95%; POS, 17.73%; ATM, 1.64%; and RTGS,
2.68%, 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
22 September 2023
WEEK ENDING
29 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; 2,68%
POS; 17,73%
ATM; 1,64%
MOBILE; 77,95%
RTGS
POS
ATM
MOBILE

4.
INTERNATIONAL COMMODITY PRICE DEVELOPMENTS


During the week of analysis, international average prices for all selected commodities decreased,
mainly underpinned by the strengthening of the U.S. dollar. Table 7 shows commodity price
developments, during the week ending 29th September 2023.

Table 7: Metal and Crude Oil Prices for the week ending 29th September 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil
Lithium

US$/ounce
US$/ounce
US$/ounce
US$/tonne
US$/tonne
US$/barre
l
US$/tonne

Weekly Average
(18 - 22 Sep)

25-Sep

26-Sep

27-Sep

28-Sep

29-Sep

Weekly Average
(25 - 29 Sep)

Weekly Change

Source: BBC, KITCO and Bloomberg 2023

Gold

Gold prices declined by 1.79%, from an average of US$1,928.53 per ounce recorded in the prior
week to US$1,893.94 per ounce, during the week under review. Prices were weighed down by a
stronger U.S. dollar and surging Treasury yields, on expectations that the U.S. Federal Reserve
would maintain a restrictive monetary policy stance.

Platinum
During the week under review, platinum prices retreated by 2.73% to US$909.90 per ounce,
from US$935.40 per ounce reported in the previous week. The slowdown was mainly attributable
to weaker-than-expected economic growth in China, which affected the demand for the precious
metal.

Palladium
Palladium prices declined by 1.65% to US$1,242.40 per ounce during the week under analysis,
from US$1,263.30 per ounce recorded in the previous week. This was largely due to sluggish
industrial demand for the precious metal.

Copper
Copper prices decreased by 1.06% to close at US$8,175.60 per tonne, from US$8,263.60 per
tonne recorded in the previous week. Prices of the red metal fell amid high inventories and
weaker-than-expected economic recovery in China, which affected the metal’s demand outlook.

Nickel
Nickel prices decreased by 3.53% to US$18,828.00 per tonne during the week ending 29th
September 2023, from US$19,516.60 per tonne reported in the previous week. The decline was
attributable to the subdued demand outlook, largely in China, the world’s largest metal consumer.

Lithium
Lithium prices fell by 5.17%, from US$27,860.00 per tonne in the week ending 22nd September
2023 to US$26,420.00 per tonne, during the week under-analysis. This was, in large part, on
account of weak demand in China.

Brent Crude Oil
During the week ending 29th September 2023, crude oil prices marginally declined by 0.01% to
US$93.64 per barrel, from US$93.65 per barrel reported in the previous week. Prices fell
following concerns about the projected slowdown in the global economy, which is expected to
undercut the demand for energy.

Exchange Rate Developments
Interbank Market
The Zimbabwe dollar (ZW$) depreciated by 5.1% on the interbank market, from an average of
ZW$5,045.50 per US$1 in the prior week to ZW$5,302.45 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 (18 - 22 Sep)

25-Sep

26-Sep

27-Sep

28-Sep

29-Sep

Weekly Average (25 - 29 Sep)

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

Source: Reserve Bank of Zimbabwe, 2023


5. EQUITY MARKETS

During the week ending 29th September 2023, the Zimbabwe Stock Exchange (ZSE) recovered
from previous week losses, while bullish sentiments persisted on the Victoria Falls Stock
Exchange (VFEX). As a result, the ZSE and VFEX All Share indices added 9.66% and 2.87%
to close at 126 642.42 points and 74.50 points, respectively.

Zimbabwe Stock Exchange (ZSE) Developments

The Top 10, Top 15, Medium and Small Cap indices added 15.78%, 10.55%, 0.52% and 29.49%
to close at 56 560.21 points, 76 687.01 points, 498 045.42 points and 2 955 646.81 points,
compared to previous week’s positions of 48 853.49 points, 69 366.31 points, 495 489.82 points
and 2 282 585.59 points, respectively.

Figure 3 shows developments on the ZSE’s All Share, Top 10 and Mining indices for the period
from 30 September 2022 to 29 September 2023.

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

Source: Zimbabwe Stock Exchange, 2023


The gain in the mainstream index emanated from share price increases for Truworths Limited
(100.00%), Delta Corporation Limited (33.06%), Dairibord Holdings Limited (28.47%),
Willdale Limited (27.18%) and Tanganda Tea Company Limited (27.07%).

Partially offsetting the abovementioned gains were losses in the share prices of First Mutual
Holdings Limited (12.02%), OK Zimbabwe Limited (8.85%), Mashonaland Holdings Limited
(8.09%), Zimre Holdings Limited (6.98%) and AfDis Limited (11.20%). The resource index
remained unchanged at 125 531.67 points, during the week under review.

Market Turnover
During the week under analysis, the cumulative volumes and values of shares traded on the ZSE
increased by 129.07% and 44.39% to 47.19 million shares and ZW$13,443.90 million, compared
to 20.60 million shares and ZW$9,310.74 million recorded in the prior week, respectively. The
surge in the turnover volume and value of shares traded was largely informed by block trades,
where 25 million Fidelity Life Assurance Limited shares and 10 million OK Zimbabwe Limited
shares exchanged hands at ZW$211 and ZW$120 per share, respectively.

Figure 4 shows the trend in daily market turnover for the period from 30 September 2022 to 29
September 2023.


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
18-Aug-23
01-Sep-23
15-Sep-23
29-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
As a result of improved trading activity on the ZSE during the week under review, the market
added 9.44%, or ZW$851.48 billion worth of capitalization to close at ZW$9,873.49 billion,
from ZW$9,022.01 billion registered in the previous week.

Figure 5 shows the evolution of market capitalization for the period from 30 September 2022 to
29 September 2023.

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


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
18-Aug-23
01-Sep-23
15-Sep-23
29-Sep-23
ZW$ (Million)
Negotiated Deal: 241 million
First Mutual Holdings
Limited shares exchanged


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
18-Aug-23
01-Sep-23
15-Sep-23
29-Sep-23
$ Billions

Victoria Falls Stock Exchange (VFEX) Developments

The VFEX mainstream index increased as a result of share price gains for African Sun Limited
(26.32%), Innscor Africa Limited (6.67%), Axia Corporation Limited (6.25%), National Foods
Holdings Limited (4.06%) and Simbisa Brands Limited (2.04%). Partially offsetting the gains
were losses in the share prices of Seed Co International VX (3.97%), First Capital Bank Limited
(3.29%), Zimplow Holdings Limited (1.35%) and Padenga Holdings Limited (0.28%)

VFEX Market Turnover

The cumulative value of shares traded on the VFEX amounted to US$0.47 million, an increase
of 28.58%, compared to US0.36 million recorded in the prior week, despite the 59.65% decline
in the volume of shares traded.

VFEX Market Capitalization
Owing to improved investor demand for stocks listed on the VFEX bourse during the week under
review, the market added 2.87% worth of capitalization to close at US$1.27 billion, compared to
US$1.24 billion recorded in the previous week.


Figure 6 shows the trend in the VFEX All Share Index (ASI) for the period 30 September 2022
to 29 September 2023.

Figure 6: VFEX All Share Index

Source: Victoria Falls Stock Exchange (VFEX), 2023

6. IMPACT OF CLIMATE CHANGE ON ECONOMIC PERFORMANCE

There are emerging widespread views that climate change dynamics should be part of the
formulation of monetary policy given the significant impact of extreme weather patterns on
overall macroeconomic stability. The negative impacts of climate change on macroeconomic
stability; and hence financial stability are more likely tilted against Africa and other developing
counties with poor mitigation measures. This is despite the continent’s minimal contribution to
overall global emissions, which are the main drivers of climate change, compared to emissions
by more industrialized advanced countries.

Zimbabwe is prone to climate change risks as evidenced by intermittent droughts the country has
been experiencing over the years. Since 2007, for example, the country has experienced several
droughts largely attributable to the El Nino phenomenon. This suggests that climate change and
climate variability will continue to present shocks to the performance of the economy, given the
country’s dependence on rain fed agriculture, the main sector driving the economy. Erratic
rainfall patterns tend to have negative pass-through effects on agriculture output, with spill-over
effects on other sectors of the economy, given its strong linkages with the rest of the economy.

As shown in Figure 7, there has been a strong correlation between drought episodes and real
GDP growth in Zimbabwe, with drought episodes being characterised by negative real growth
rates.


Figure 7: GDP Growth and Agriculture Sector Growth (%) 2007 to 2022


RESERVE BANK OF ZIMBABWE


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Drought Event
GDP growth (annual %)
Agriculture Growth %


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.


29- Aug-23
WHOLESALFX

12-Sep-23


19-Sep-23


26-Sep-23
Total
Bids (US$ dollars)
19,610,040.40

18,726,643.25

19,232,100.00

18,893,948.0
Amount Allotted (US$
dollars)
19,610,040.40

19,610,040.40


18,250,000.00

18,693,948.80
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


29-Aug-23

12-Sep-23

19-Sep-23

26-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
545,877.82
1,161,863.98
713,950.34
1,123,944.44