Vol. 25 No. 44


Week Ending
3rd November 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 3rd November 2023. The report also covers developments in mineral commodity
prices and stock markets during the same week. The last section of the report presents a brief on
inflation expectations and monetary policy.

The Zimbabwe Stock Exchange (ZSE) traded in a positive trajectory, while the Victoria Falls
Stock Exchange (VFEX) exhibited bearish sentiment, during week under analysis. The country’s
National Payment Systems (NPS) processed transactions valued at ZW$6 trillion, reflecting an
increase of 9.40% from the previous week.

Minimum and maximum deposit rates for foreign currency deposits remained unchanged, during
the week ending 3rd November 2023. In the same week, international commodity prices for gold,
platinum, copper and palladium increased, while those for lithium, nickel, and crude oil
decreased.
2. INTEREST RATES

Local Currency (ZW$) Deposit Rates

During the week ending 3rd November 2023, minimum and maximum deposit rates for all deposit
classes remained largely unchanged. The average deposits rates were as shown in Table 1.

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
(%)
6-Oct-23
34.29
35.60
59.00


13-Oct-23

20-Oct-23

27-Oct-23

3-Nov-23

Source: Reserve Bank of Zimbabwe, 2023

Local Currency (ZW$) Lending Rates
During the week under analysis, minimum lending rates for both individual and corporate clients
declined marginally by 0.18 and 0.16 percentage points, respectively. Maximum lending rates
for both individual and corporate clients also decreased by 0.33 and 0.07 percentage points,
respectively. The lending rates were as shown in Table 2.


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

Individual Clients

Corporate Clients

6-Oct-23

13-Oct-23

20-Oct-23

27-Oct-23

3-Nov-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

During the week under review, minimum and maximum foreign currency deposit rates for all
deposit classes remained unchanged, as 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
(%)
6-Oct-23

13-Oct-23

20-Oct-23

27-Oct-23

3-Nov-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Lending Rates
Minimum foreign currency lending rates for both individuals and corporate clients softened,
during the week under analysis. Maximum lending rates for individuals, however, registered a
marginal increase, while maximum lending rates for corporate clients decreased by 1.11
percentage points.

Table 4: Lending Rates (per annum)

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

Individual Clients
Corporate Clients

6-Oct-23

13-Oct-23

20-Oct-23

27-Oct-23

3-Nov-23

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

The total value of transactions processed through the National Payment Systems was ZW$6.02
trillion, during the week ending 3rd November 2023, representing an increase of 9.40% from the
previous week. Transactions processed through the Real Time Gross Settlement (RTGS) system
rose by 6.47% to close at ZW$4.95 trillion, during the reporting week. The distribution of NPS
transactions, in value terms, was as follows: RTGS, 82.22%; Mobile, 6.03%, Point of Sale (POS),
5.80% and Automated Teller Machines (ATM), 5.96%, as shown in Figure 1.

Figure 1: Composition of NPS Transactions in Value Terms

Source: Reserve Bank of Zimbabwe, 2023


RTGS
82.22%
POS
5.80%
ATM
5.96%
MOBILE
6.03%
RTGS
POS
ATM
MOBILE

The volume of transactions processed through the NPS increased by 14.70% to close at 13.56
million during the reporting week, largely due to increases in POS and mobile transaction
volumes. The NPS transaction volumes were distributed as follows: Mobile, 80.95%; POS,
15.93%; ATM, 1.30%; and RTGS, 1.82%, 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
27 OCTOBER

WEEK ENDING
03 NOVEMBER

% CHANGE
FROM LAST
WEEK
PROPORTION

VALUES IN DOLLARS

RTGS

POS

ATM

MOBILE

TOTAL


VOLUMES

RTGS

POS

ATM

MOBILE

TOTAL

Source: Reserve Bank of Zimbabwe, 2023


RTGS, 1.82%
POS, 15.93%
ATM, 1.30%
MOBILE, 80.95%
RTGS
POS
ATM
MOBILE

4. INTERNATIONAL COMMODITY PRICE DEVELOPMENTS


During the week under review, international commodity prices for gold, platinum, palladium,
and copper rose, while those for crude oil, nickel and lithium declined, as shown in Table 6.

Table 6: Metal and Crude Oil Prices for the week ending 3rd November 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
(23 – 27 Oct)

30-Oct
1,996.88


31-Oct

1-Nov
1,984.43


2-Nov

3-Nov
1,991.48


Weekly Average
(30 Oct - 03 Nov)

Weekly Change


Source: BBC, KITCO and Bloomberg 2023

Precious Metals

Gold, platinum, and palladium prices gained by 0.68%, 3.36% and 0.25%, respectively, during
the week ending 3rd November 2023. This was on account of indications of softening of monetary
policy by the Fed Res as well as the attractiveness of the precious metals as safe haven assets for
the store of value and investment. Lithium prices fell by 4.64% during the week under-analysis,
amid weak demand for battery cells from Eastern Asia and Europe. Figure 3 shows the trend in
commodity prices for gold, platinum, palladium, and lithium for the period from 30th October
2023 to 3rd November 2023.

Figure 3: Weekly Precious Metals Price Developments (30 Oct. 2023 - 03 Nov. 2023)

Source: Kitco,2023

Source: Kitco,2023

Source: Kitco,2023

Source: London Metal Exchange,2023

Base Metals and Brent Crude Oil

Copper prices gained by 1.38%, mainly driven by positive sentiments since the Fed hinted at the
end of its Monetary Policy tightening cycle and the increased demand from China, following the
decrease in its inventories. However, nickel and crude oil prices fell by 0.72% and 3.45%,
respectively. Nickel prices declined, amid low demand triggered by fears of elevated interest
rates, heightened inflationary pressures, and the downturn in the electric vehicle industry, which
slowed down market activity. On the other hand, oil prices settled lower, driven by improved
deliveries. Figure 4 shows daily commodity price developments for copper, nickel, and crude oil
for the period from 28th October 2023 to 3rd November 2023.

US$/ounce
Gold
Gold
Linear (Gold)

30-Oct 31-Oct 1-Nov
2-Nov
3-Nov
US$/ounce
Platinum
Platinum
Linear (Platinum)

US$/ounce
Palladium
Palladium
Linear (Palladium)

US$/tonne
Lithium Hydroxide
Lithium Hydroxide
Linear (Lithium Hydroxide)

Figure 4: Daily Commodity Price Developments for Copper, Nickel, and Brent crude oil

Source: London Metal Exchange,2023

Source: London Metal Exchange,2023

Source: BBC,2023


28-Oct
29-Oct
30-Oct
31-Oct
1-Nov
2-Nov
3-Nov
US$/tonne
27-Oct
30-Oct
31-Oct
1-Nov
2-Nov
3-Nov
Copper

Copper
Copper
Linear (Copper)

28-Oct
29-Oct
30-Oct
31-Oct
1-Nov
2-Nov
3-Nov
US$/tonne
27-Oct
30-Oct
31-Oct
1-Nov
2-Nov
3-Nov
Nickel

Nickel
Nickel
Linear (Nickel)

28-Oct
29-Oct
30-Oct
31-Oct
1-Nov
2-Nov
3-Nov
US$/barrel
27-Oct
30-Oct
31-Oct
1-Nov
2-Nov
3-Nov
Brent crude oil

Brent crude oil
Brent crude oil
Linear (Brent crude oil)

Exchange Rate Developments
Interbank Market

The Zimbabwe dollar (ZW$) marginally depreciated by 0.62% on the interbank market, from an
average of ZW$5,687.88 per US$1 in the prior week to ZW$5,723.22 per US$1, during the week
under analysis. The ZW$ also depreciated against the ZAR, BWP, EURO, and GBP by 2.18%,
1.23%, 0.51 % and 0.34%, respectively, as shown in Table 7.

Table 7: Selected Exchange Rates (ZW$ per unit of foreign currency)

USD
ZAR
GBP
BWP
EURO
Weekly Average (23- 27 Oct)

30-Oct

31-Oct

01-Nov

02-Nov

03-Nov

Weekly Average (30 Oct – 03 Nov)

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

Source: Reserve Bank of Zimbabwe, 2023

5. EQUITY MARKETS

During the week ending 3rd November 2023, the Zimbabwe Stock Exchange (ZSE) traded in a
positive trajectory, while bearish sentiments characterised the Victoria Falls Stock Exchange
(VFEX). Resultantly, the ZSE All Share Index rose by 7.84% to close at 161 050.06 points, while
the VFEX All Share index lost 4.26% to close at 67.59 points.

Zimbabwe Stock Exchange (ZSE) Developments
The Top 10, Top 15, Medium and Small Cap indices added 8.99%, 8.88%, 5.42% and 8.48% to
close at 71 537.08 points, 96 384.72 points, 648 559.23 points and 5 342 954.00 points. Figure
5 shows developments on the ZSE’s All Share, Top 10 and Mining indices for the period from
4th November 2022 to 3rd November 2023.

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

Source: Zimbabwe Stock Exchange, 2023

The growth in the mainstream index was largely on account of share price gains for General
Beltings Holdings Limited (51.94%), NMBZ Holdings Limited (33.16%), Zimre Holdings
Limited (23.90%), Delta Corporation Limited (18.45%) and Afdis Distillers Limited (14.99%).
Losses were, however, registered in share prices of Edgars Stores Limited (11.90%), CFI
Holdings Limited (9.10%), Meikles Limited (4.49%), Rainbow Tourism Group Limited (3.70%)
and British American Tobacco Zimbabwe (BAT) Limited (3.54%). The resource index remained
unchanged at 125 531.67 points, during the week under review.

Market Turnover
The cumulative volume and value of shares traded on the ZSE declined by 34.95% and 17.90%
to 15.65 million shares and ZW$8 365.97 million, respectively. Figure 6 shows the trend in daily
market turnover for the period from 4th November 2022 to 3rd November 2023.


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
20-Oct-23
03-Nov-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
Owing to the positive momentum on the ZSE during the week under review, the market gained
7.63%, or ZW$913.44 billion worth of capitalization to close at ZW$12 883.61 billion, from
ZW$11 970.17 billion recorded in the prior week. Figure 7 shows the evolution of ZSE market
capitalization for the period from 4th November 2022 to 3rd November 2023.

Figure 7: Market Capitalization
Source: Zimbabwe Stock Exchange, 2023


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
20-Oct-23
03-Nov-23
ZW$ (Million)
Negotiated Deal: 241 million
First Mutual Holdings
Limited shares exchanged
hands at ZW$196/share


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
20-Oct-23
03-Nov-23
$ Billions

Victoria Falls Stock Exchange (VFEX) Developments
The decrease in the VFEX mainstream index emanated from share price losses for SeedCo
International VX (23.33%), African Sun Limited (14.14%), Bindura Nickel Corporation (BNC)
(10.32%), Innscor Africa Limited (6.22%) and First Capital Bank Limited (5.53%). Partially
offsetting the above-mentioned losses was a gain in the share price of Zimplow Holdings Limited
(9.89%).

VFEX Market Turnover
The volume and value of shares traded on the VFEX rose by 55.74% and 163.52% to 8.37 million
shares and US$1.19 million, during the week under analysis.

VFEX Market Capitalization
Owing to dampened investor appetite on the USD denominated market during the week under
analysis, the VFEX capitalization lost 4.26% to close at US$1.16 billion, down from US$1.21
billion recorded in the previous week. Figure 8 shows the trend in the VFEX All Share Index
(ASI) for the period from 4th November 2022 to 3rd November 2023.

Figure 8: VFEX All Share Index

Source: Victoria Falls Stock Exchange (VFEX), 2023

6. INFLATION EXPECTATIONS AND MONETARY POLICY

Expectations play an important role in moulding the behaviour of economic agents. As such,
inflation expectations continue to attract the attention of monetary policy makers. Inflation
expectations refer to the predicted future inflation rate that businesses and consumers
anticipate in making savings and investment decisions.

Precisely, if economic agents expect prices to increase by a certain margin over a specified
period, then they will seek to increase prices basing on the expected outturn of inflation.
Central banks are concerned with inflation expectations because they are an important
determinant of actual inflation.

Inflation expectations can be moulded through adaptive expectations and/or rational
expectations. Adaptive expectations emanate from individuals relying on past experiences to
make decisions about the future. On the other hand, under rational expectations, economic
agents utilise existing multiple information sources, an understanding of the behaviour of
other economic agents and some economic theory to make rational economic decisions about
future economic outcomes.

Inflation expectations surveys are used in policy making for guiding monetary policy
decisions about the expected trajectory of inflation and interest rate determination. In this
regard, if inflation expectations are not accurately aligned with the expected future path of
inflation as guided by the central bank, they can have detrimental effects on the attainment of
monetary policy objectives. The backward and forward-looking behaviour of economic agents
should thus be adequately captured in the policy-making processes.

Policy implementation by central banks particularly aims at anchoring inflation expectations
to enhance the attainment of policy objectives and contribute to macroeconomic stability. The
Bank remains cognisant of the role of inflation expectations in shaping inflation dynamics in
the economy and continues to actively take various measures to anchor inflation expectations.

RESERVE BANK OF ZIMBABWE


APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR WHOLESALEFX1


Source: Reserve Bank of Zimbabwe, 2023


1 Wholesale Foreign Currency Auction (Wholesale FX) is normally conducted on Tuesday every week. 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.


10-Oct-23
WHOLESALE FX


18-Oct-23


24-Oct-23


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

Amount Allotted (US$
dollars)

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


10-Oct-23

18-Oct-23

24-Oct-23

30-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
1,868,427.23
1,937,178.64
1,958,167.67
1,582,724.27