Vol. 25 No. 30


Week Ending
28th July 2023
Weekly Economic
Highlights
TABLE OF CONTENTS


RECENT DEVELOPMENTS IN EXCHANGE RATES AND


1.
OVERVIEW

This report provides an analysis of the developments in the money and capital markets for the
week ending 28th July 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 exchange rates and prices.


The Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VEFX) exhibited
bearish sentiments during the week under analysis. 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 decrease in RTGS transactions.


The deposit rates for the domestic currency deposits remained largely unchanged except for
minimum deposit rates for 12-month tenure which increased while the maximum deposit rates
for the same tenure decreased. The performance of ZWL lending rates for loans to individuals
and corporates was mixed during the week under analysis.


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 were, however, lower
during the same period.

2.
INTEREST RATES

Local Currency (ZWL) Deposit Rates

Minimum and maximum ZWL deposit rates for savings deposits and deposits rates for 1-month,
3-month and 6-month remained largely unchanged. The minimum deposit rates for 12-month
tenure, however, declined while the maximum deposit rates for the same tenure increased during
the week under analysis. Commercial banks continued to offer high deposit rates for long term
deposits as banks seek to attract long-term deposits amid 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
(%)
7-Jul-23


14-Jul-23

21-Jul-23


28-Jul-23


Source: Reserve Bank of Zimbabwe, 2023


Local Currency Lending Rates

The minimum ZWL lending rates for both corporate and individual clients increased during the
period of analysis. On the contrary, maximum ZWL lending rates for both individual and
corporate clients registered a marginal decrease. The downward adjustments in maximum
lending rates for corporates witnessed during the last 1 month is expected to boost borrowing by
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
30-Jun-23

7-July-23

14-July-23

21-Jul-23

28-Jul-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

The minimum and maximum savings deposits rates on foreign currency deposits for 1-month, 3month, 6-month and 12-month tenure remained unchanged during the week under analysis. The
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
(%)
7-July-23

14-July-23

21-Jul-23

28-Jul-23

Source: Reserve Bank of Zimbabwe, 2023


Foreign Currency (USD) Lending Rates


Minimum foreign currency lending rates (FCA) for individual clients declined marginally while
for corporate clients remained unchanged during the week under review. Maximum foreign
currency lending rates for individual clients marginally increased while for corporate clients
declined during the week ending 28th July 2023. The reduction in FCA lending rates for corporate
clients is a positive development as it encourages borrowing to boost production in the economy.

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

Individual Clients

Corporate Clients
23-Jun-23

30-Jun-23

7-July-23

14-July-23

21-Jul-23

28-Jul-23

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

The value of transactions processed through the National Payment System (NPS) declined during
the week under analysis from ZW$5.64 trillion in the previous week to ZW$4.52 trillion. The
lower value of NPS transactions was mainly driven by the decline in Real Time Gross Settlement
RTGS transaction values by 25.6% to close at ZW$3.82 trillion during the week under review.

The market continued to be characterised by tight liquidity conditions. 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, however,
increased by 16.9% to close at 9.96 million. This largely reflected increases in ATM transaction
volumes. NPS transaction volumes were distributed as follows: Mobile, 72.96%; POS, 22.20%;
RTGS, 3.00%; and ATM, 1.84%, shown in Figure 2.

Figure 2: Composition of NPS Transactions in Volume Terms

Source: Reserve Bank of Zimbabwe, 2023


RTGS
84.48%
POS
6.53%
ATM
4.84%
MOBILE
4.15%
RTGS
POS
ATM
MOBILE
RTGS, 3.00%
POS, 22.20%
ATM, 1.84%
MOBILE, 72.96%
RTGS
POS
ATM
MOBILE


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

28 July 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
As at the 28th of July 2023, or the 98th day of the tobacco selling season, a cumulative total of
293.7 million kilograms of tobacco had been sold, compared to a cumulative total of 203.09
million kilograms sold during the same period in 2022. The turnover realized from the sales
amounted to US$890 million in 2023, a 43.29% increase from US$621.12 million realized during
the same period in 2022.

Table 6: Weekly Cumulative Tobacco Sales: Day 98th (28th July 2023)

Variance (%)
Cumulative Quantity Sold (million
kgs)
203,086,971
293,694,479
44,62
Average Price (US$/kg)
3.06
3.03
-0.92
Cumulative value (US$ million)
621,115,806
890,000,836
43.29
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 under review, copper, nickel and crude oil prices increased while average
international prices for gold, platinum, palladium declined. Table 7 shows developments in
prices for selected commodities, during the week under review.

Table 7: Metals and Crude Oil Prices: Week ending 28th July 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil

US$/ounce
US$/ounce
US$/ounce
US$/tonne
US$/tonne
US$/barrel
Weekly
Average
(17- 21July)

24-July

25-July

26-July

27-July

28-July

Weekly
Average
(24- 28 July)

Weekly
Change (%)

Source: BBC, KITCO and Bloomberg 2023

Gold

Gold prices recorded a modest 0.34 % decline, from a weekly average of US$1,967.71 per ounce
in the previous week to US$1,960.98 per ounce, during the week ending 28th July 2023. This
followed the appreciation of the US dollar which dampened the precious metal’s appeal as a safe
haven asset.

Platinum
Platinum prices declined by 1.57%, from a weekly average of US$975.10 per ounce in the prior
week to US$959.80 per ounce, during the reporting week. Prices were weighed down by a
stronger US dollar and weak industrial demand from key sectors, particularly the automotive
industry, which extensively utilizes platinum in catalytic converters.

Palladium
In the week under review, palladium prices receded by 2.27%, from a weekly average of
US$1,297.50 per ounce in the prior week to US$1,268.10 per ounce. The decline was
underpinned by a stronger US dollar.


Copper
Copper prices rebounded by 1.81%, from an average of US$8,465.90 per tonne in the previous
week to US$8,619.30 per tonne, during the week ending 28th July 2023. Prices increased on
prospects of further stimulus-induced economic growth in China, the world’s top metal
consumer. Additionally, supply constraints and labour disputes in major copper-producing
regions further tightened the market, supporting the price rally.
Nickel
Nickel prices increased by 2.97%, from a weekly average of US$21,207 per tonne in the prior
week to US$21,836 per tonne, during the reporting week. The increase in nickel prices followed
heightened supply constraints in Indonesia, a key nickel producer in the world.
Brent Crude Oil
Brent crude oil prices surged by 4.65% to US$83.51 per barrel during the week under analysis,
from US$79.80 per barrel recorded in the previous week. Prices increased amid the decision by
Saudi Arabia, the world’s biggest exporter of crude oil to voluntarily cut oil production.


Exchange Rate Developments

Interbank Market
The Zimbabwe dollar (ZW$) appreciated by 5.2% on the interbank market, from an average of
ZW$4,764.23 per US$1 in the previous week to ZW$4,514.33 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 (17-21 July)

24-July

25-July

26-July

27-July

28-July

Weekly Average (24 -28 July)

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

Source: Reserve Bank of Zimbabwe, 2023


6. EQUITY MARKETS


During the week ending 28th July 2023, bearish sentiments characterized the Zimbabwe Stock
Exchange (ZSE) and the Victoria Stock Exchange (VFEX). This was, in part, on account of
continued tight liquidity conditions in the market. In tandem the ZSE and VFEX All Share
indices lost 3.08% and 2.65% to close the week at 116 748.92 points and 69.16 points,
respectively.

Zimbabwe Stock Exchange (ZSE) Developments

Reflecting tight liquidity in the market the Top 10 and Top 15 indices declined by 5.01% and
4.57% respectively to 52 904.70 points and 74 115.15 points, respectively during the week under
review. The resource index also lost 10.38% to close the week at 89 512.59 points, compared to
99 881.72 points recorded in the previous week. The Medium cap and Small cap indices,
however, increased by 0.35% and 2.91%, respectively to 444 772.53 points and 2 173 204.30
during the same period under analysis.

Figure 3 shows developments on the ZSE’s All Share, Top 10 and Mining indices from 29th July
2022 to 28th July 2023.

Figure 3: ZSE All Share, Top 10 and Mining Indices
Source: Zimbabwe Stock Exchange, 2023


29-Jul-22
12-Aug-22
26-Aug-22
09-Sep-22
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
Mining Index
All Share and Top 10 Indices
All Share Index (ZSE)
Top 10 Index
Mining Index


The decline in the mainstream index emanated from losses in share prices of OK Zimbabwe
Limited (26.29%), FBC Holdings Limited (18.73%), Meikles Limited (16.17%), CAFCA
Limited (15.00%) and Truworths Limited (14.76%).

Partially offsetting the abovementioned losses were share price gains in Masimba Holdings
Limited (23.04%), Edgars Stores Limited (16.34%), National Tyre Services Limited (14.59%),
NMBZ Holdings Limited (12.81%) and Dairibord Holdings Limited (12.03%).

Market Turnover
The cumulative volume and value of shares traded declined by 12.76% and 19.12% to 24.86
million shares and ZW$9 633.70 million, respectively. This compares to 28.49 million shares
and ZW$11 910.48 million recorded in the prior week, respectively.

Figure 4 shows the trend in daily market turnover for the period 29th July 2023 to 28th July 2023.

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


Market Capitalisation
Owing to negative trading on the ZSE during the week under review, the market shed 2.74%, or
ZW$262.44 billion worth of capitalization to close at ZW$9 328.87 billion, compared to ZW$9


29-Jul-22
12-Aug-22
26-Aug-22
09-Sep-22
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
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

591.31 billion registered in the previous week. Figure 5 shows the evolution of market
capitalization for the period 29th July 2022 to 28th July 2023.

Figure 5: Market Capitalization

Source: Zimbabwe Stock Exchange, 2023


Victoria Falls Stock Exchange (VFEX) Developments
The VFEX All Share indices lost 2.65% to close the week at 69.16 points, reflecting share price
declines in Caledonia Mining Corporation PLC Limited (15.63%), Padenga Holdings Limited
(14.67%), Innscor African Limited (7.54%), SeedCo International VX (3.23%) and Bindura
Nickel Corporation Limited (BNC) (2.76%). Partially offsetting the abovementioned losses were
increases in the share prices of Africa Sun Limited (15.67%) and Axia Corporation Limited
(2.55%) and National Foods Holdings Limited (0.50%) counters.

VFEX Market Turnover
The VFEX cumulative volume and value of shares traded added 20.69% and 8.92% to 1.39
million shares and US$0.37 million, respectively.

VFEX Market Capitalization
Reflecting the bearish sentiments exhibited on the VFEX during the week under analysis, the
market lost 2.65% worth of capitalization to close at US$1.18 billion, compared to US$1.21
billion registered in the previous week.


29-Jul-22
12-Aug-22
26-Aug-22
09-Sep-22
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
$ Billions

Figure 6 shows the trend in the VFEX All Share Index for the period 29th July 2022 to 28th July

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

7.
RECENT DEVELOPMENTS IN EXCHANGE RATES AND PRICES.

The recent stabilisation measures implemented by the Reserve Bank of Zimbabwe (the Bank)
and Government continue to have a positive effect on the economy, thereby dissipating adverse
inflation expectations. Against this background, the Bank has noted the continued stabilisation
of the exchange rates and prices in the economy.
The further liberalisation of the market for foreign exchange supported by the introduction of the
wholesale foreign exchange auction has been critical in stabilising the exchange rate. It has had
a dual effect of increasing foreign currency liquidity and mopping up excess local currency
liquidity, leading to tight liquidity conditions in the market.
This, coupled with requirement for payment of Government taxes and duties in local currency
has also boosted the demand for the Zimbabwe dollar. As a result, the exchange rate has been
correcting towards the equilibrium path on both the interbank market and the alternative markets
since the mid-June 2023. The correction of the exchange rate has dampened inflationary
pressures in the economy. Figure 7 shows the trend in the interbank exchange rate.

29-Jul-22
12-Aug-22
26-Aug-22
09-Sep-22
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-...
24-Mar-...
07-Apr-23
21-Apr-23
05-May-...
19-May-...
02-Jun-23
16-Jun-23
30-Jun-23
14-Jul-23
28-Jul-23

Figure 7: Interbank exchange rate

Source: Reserve Bank of Zimbabwe
Importantly, the correction of the exchange rate drove a return to normalcy in pricing dynamics
in the economy. As a result, monthly inflation which had increased by 74.5% in June 2023,
reversed to -15.7% in July 2023. Similarly, annual inflation which rose to 175.8% in June 2023
fell to 101.3% in July 2023 and is expected to continue moderating as the monetary policy
measures take full effect.
The decline in monthly inflation in July 2023 was broad-based, as witnessed by the decline in
the contribution of all Consumer Price Index (CPI) categories while food and beverages,
recreation and culture and health contributed negatively to overall inflation. This entails that the
moderation of inflation is likely to be sustained in the short to medium-term. Figure 8 shows the
contribution of the various CPI categories to recent developments in monthly inflation.


5-May 12-May 19-May 26-May 2-Jun
9-Jun
16-Jun 23-Jun 30-Jun
7-Jul
14-Jul
21-Jul
28-Jul
Interbank Rate

Figure 8: Percentage contribution by category to overall Month-on-month inflation (%)

Source: Zimstat, 2023
The recent decline in inflation is also corroborated by the weekly price surveys conducted by the
Bank that show that inflation had responded positively to the recent measures implemented by
the Bank. This is reflected by the significant decline in inflation in the economy since the
Monetary Policy Committee (MPC) meeting of 6 June 2023. As shown in Figure 9, weekly prices
changes had been negative since 30 June 2023.
Figure 9: Impact of Recent Monetary Policy Measures on Inflation

-30
-20
-10

Jan2023 Feb2023 Mar2023 Apr2023 May2023 Jun2023
Jul2023
Miscellaneous goods and services
Restaurants and hotels
Education
Recreation and culture
Communication
Transport
Health
Furniture, household equipment and
maintenance
Housing water electricity gas and other fuels
Clothing and footwear
Alcoholic beverages and tobacco
Food and non alcoholic beverages
All Items
-20
-10

06-Jan-23
13-Jan-23
20-Jan-23
27-Jan-23
03-Feb-23
10-Feb-23
17-Feb-23
24-Feb-23
03-Mar-23
10-Mar-23
17-Mar-23
24-Mar-23
31-Mar-23
06-Apr-23
14-Apr-23
21-Apr-23
28-Apr-23
5-May-23
12-May-23
19-May-23
26-May-23
2-Jun-23
9-Jun-23
16-Jun-23
23-Jun-23
30-Jun-23
7-Jul-23
14-Jul-23
21-Jul-23
28-Jul-23
WOW Change
Impact of
Resolutions of the
Monetary Policy
Committee Meeting
held on 6 June 2023


The weekly price surveys by the Bank showed that the decline in prices was broad-based, and
therefore likely to be sustained. Almost all basic commodities have been recording price declines
since mid-June 2023. Fast-moving goods such as bread, mealie-meal and cooking oil recorded
pronounced price declines as shown in Table 9.
Table 9: Week-on-Week Changes in Average Price of Basic Commodities (ZWL)

Source: Reserve Bank of Zimbabwe, 2023
The Bank has, however, noted that slow moving products such hardware goods, electronics and
pharmaceuticals have somewhat remained sticky downwards and recorded minimal price
declines. This is because most of these slow-moving products were procured at abnormally
depreciated exchange rates, with business betting on continued depreciation of the exchange rate.
As such, businesses are resisting taking losses on supplies they procured during the period of
exchange rate volatility as they could fail to replenish their stocks. These businesses are implored
to correct their pricing models, as the current exchange rate stability is durable and would be
sustained in the medium term. The Bank is going to stay the course of tight monetary policy and
would take significant measures to address any potential and emerging risks to exchange rate
and inflation in the remainder of the year and beyond.

RESERVE BANK OF ZIMBABWE
Week Ending Bread
Mealie Meal
Meat - Chickens
Cooking Oil Cordials
5-May-23 -137.15

12-May-23 623.90

19-May-23 -598.01

26-May-23 1406.51

2-Jun-23 521.004

9-Jun-23 3217.75

16-Jun-23 970.61

23-Jun-23 183.90
-2266.56
-16068.08
12752.93 447.48
30-Jun-23 -532.98

7-Jul-23 -947.53

14-Jul-23 -24.63

21-Jul-23 -563.93

28-Jul-23 -33.17


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
18-July-23 20-July-23 25-July-23 27-July-23
Total
Bids (US$ dollars)
11,597,990.00
6,383,500.00

14,471,600.00
14,226,060.00

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
04-July-23 11-July-23 18-July-23 25-July-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
797,323.53
580,921.57
460,130.60
601,650.01