Vol. 25 No. 32


Week Ending
11th August 2023
Weekly Economic
Highlights
TABLE OF CONTENTS


AN OVERVIEW OF THE RECENT MONETARY POLICY

1.
OVERVIEW

This report provides an analysis of the developments in the money and capital markets for the
week ending 11th August 2023. The report also covers developments in the tobacco, mineral
commodities, and stock markets during the week. The last section of the report presents an
overview of the 2023 Mid-Term Monetary Policy Statement.


The Zimbabwe Stock Exchange (ZSE) exhibited bearish sentiments while the Victoria Falls
Stock Exchange (VEFX) recovered from the previous week’s loss during the week under review.
The value of transactions processed through the National Payment System (NPS) was higher
during the week under analysis compared to the previous week, largely reflecting increases in
the value of RTGS transactions.


Deposit rates for ZWL deposits remained largely unchanged except a decline in the maximum
savings deposit rates. The developments on the ZWL lending rates for individuals and corporates
continued to be mixed during the week ending 11th August 2023.


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
compared to the corresponding period in the previous year.


2.
INTEREST RATES

Local Currency (ZWL) Deposit Rates

During the week under review, minimum and maximum ZWL deposit rates for all classes of
deposits largely remained unchanged except for maximum savings deposit rates which registered
a marginal decline during the same period. Commercial banks continued to offer high deposit
rates for long term deposits in order to attract long term deposits for onward lending to clients
on the back of high demand for credit in local currency.

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
(%)
21-Jul-23

28-Jul-23


04-Aug-23

11-Aug-23


Source: Reserve Bank of Zimbabwe, 2023


Local Currency Lending Rates

The minimum and maximum ZWL lending rates for individual and corporate clients increased
marginally during the week ending 11th August 2023. Minimum deposit rates for corporates,
however, registered a decline during the period. The ZWL lending rates are shown in Table 2.


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

Individual Clients

Corporate Clients
14-July-23

21-July-23

28-Jul-23

04-Aug-23

11-Aug-23

Source: Reserve Bank of Zimbabwe, 2023

Foreign Currency (USD) Deposit Rates

During the week ending 11th August 2023, minimum and maximum deposits rates for deposit
rates for all tenors remained unchanged. The 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
(%)
21-July-23

28-July-23

04-Aug-23

11-Aug-23

Source: Reserve Bank of Zimbabwe, 2023


Foreign Currency (USD) Lending Rates


Minimum foreign currency lending rates (FCA) for individuals fell by 0.02 percentage points
while those for corporate clients increased by 0.04 percentage points during the week under
review. Maximum lending rates for individuals were lower while those for commercial clients
registered a decline in the week under analysis. The continued reduction in FCA lending rates
for corporate clients is a positive development as this is likely to encourage borrowing to boost
economic activities. Table 4 below shows FCA lending rates.

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

Individual Clients

Corporate Clients
07-July-23

14-July-23

21-July-23

28-Jul-23

04-Aug-23

11-Aug-23

Source: Reserve Bank of Zimbabwe, 2023

3.
CLEARING AND SETTLEMENT ACTIVITY

During the week ending 11th August 2023, the aggregate value of transactions processed through
the National Payment Systems platforms stood at ZW$4.91 trillion, representing an increase of
10.21% compared to the previous week’s value of ZW$4.4 trillion. This was on account of an
increase of 18.66% in the value of Real Time Gross Settlement (RTGS) system transactions. In
values, NPS transactions were distributed as shown in Figure 1.

Figure 1: Composition of NPS Transactions in Value Terms

Source: Reserve Bank of Zimbabwe, 2023


The volume of transactions processed through the NPS declined by 2.74% to close at 10.90
million from 11.20 million in the previous week. NPS transaction volumes were distributed as
follows: Mobile, 78.57%; POS, 18.51%; ATM, 1.24%; and RTGS, 1.68%, shown in Figure 2.


Figure 2: Composition of NPS Transactions in Volume Terms

Source: Reserve Bank of Zimbabwe, 2023


RTGS
87.66%
POS
4.80%
ATM
2.77%
MOBILE
4.78%
RTGS
POS
ATM
MOBILE
RTGS, 1.68%
POS, 18.51%
ATM, 1.24%
MOBILE, 78.57%
RTGS
POS
ATM
MOBILE

Table 5: National Payment Systems Activity
PAYMENT
STREAM
WEEK ENDING
4 August 2023
WEEK ENDING

11 August 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
During the week ending 11th of August 2023, or the 107th day of the tobacco selling season, a
cumulative total of 295.38 million kilograms of tobacco had been sold, compared to a cumulative
total of 205,90 million kilograms sold during the same period in 2022. The turnover realized
from the sales amounted to US$894.80 million, a 41.97% increase, compared to US$630.26
million realized during the same period in 2022.

Table 6: Weekly Cumulative Tobacco Sales: Day 107th (11th August 2023)

Variance (%)
Cumulative Quantity Sold (million
kgs)
205,900,064
295,375,891
43,46
Average Price (US$/kg)
3.06
3.03
-1.03
Cumulative value (US$ million)
630,259,898
894,797,508
41.97
Source: Tobacco Industry and Marketing Board (TIMB), 2023

The golden leaf continued to be 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 analysis, commodity prices for gold, platinum, palladium, copper, and
nickel retreated, whilst crude oil prices increased. Table 7 shows developments in prices for
selected commodities, during the week under review.

Table 7: Metals and Crude Oil Prices: Week ending 11th August 2023

Gold
Platinum
Palladium
Copper
Nickel
Crude Oil

US$/ounce
US$/ounce
US$/ounce
US$/tonne
US$/tonne
US$/barrel
Weekly Average
(31 July- 04 August)

7-Aug

8-Aug

9-Aug

10-Aug

11-Aug

Weekly Average
(07- 11 August)

Weekly Change (%)

Source: BBC, KITCO and Bloomberg 2023

Gold

Gold prices averaged US$1,925.58 per ounce during the week ending 11th August 2023, a 1.12%
decline from US$1,947.31 per ounce reported in the previous week. Prices weakened on the back
of a strengthening U.S. dollar and bond yields, before the publication of the U.S. Federal
Reserve’s July meeting minutes that could guide expectations on future interest rates.

Platinum
Platinum prices decreased by 1.94%, from US$928.80 per ounce in the prior week to US$910.80
per ounce during the reporting week. Prices were weighed down by a stronger US dollar and
weak industrial demand from critical sectors, particularly the automotive industry, where
platinum is extensively utilised in catalytic converters.

Palladium
Palladium prices continued in the negative territory, underpinned by receding demand in
catalytic converters. Prices declined by 0.61%, from a weekly average of US$1,252.10 per ounce
in the previous week to US$1,244.40 per ounce during the reporting week.

Copper
Copper prices fell by 2.42%, from an average of US$8,620.50 per tonne in the prior week to
US$8,411.73 per tonne, during the week under analysis. Prices declined mainly due to rising
concerns over slowing economic growth in China, the largest consumer of red metals.

Nickel
During the reporting week, nickel prices fell by 4.66%, from US$21,766.00 per tonne in the prior
week ending 11th August to US$20,751.40 per tonne. This was primarily underpinned by weak
demand in China.
Brent Crude Oil
Brent crude oil prices increased by 1.57%, from US$85.05 per barrel in the previous week to
US$86.38 per barrel, during the week ending 11th August 2023. The International Energy
Agency recorded high global demand, pushing prices to the sixth straight week of gains, the
longest streak since 2022. Additionally, prices increased due to declining global inventories and
reduced production from OPEC+ members.

Exchange Rate Developments

Interbank Market
The Zimbabwe dollar (ZW$) depreciated by 0.5% on the interbank market, from an average of
ZW$4,532.38 per US$1 in the previous week to ZW$4,554.55 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
(31 July-04 August 2023)

07-Aug

08-Aug

09-Aug

10-Aug

11-Aug

Weekly Average
(07-11 August)

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

Source: Reserve Bank of Zimbabwe, 2023

6. EQUITY MARKETS

During the week ending 11th August 2023, the Zimbabwe Stock Exchange (ZSE) exhibited
bearish sentiments while the Victoria Falls Stock Exchange (VFEX) recovered from previous
week’s loss. As such, the ZSE All Share Index lost 2.93% while the VFEX All Share index added
3.38% to close at 118 909.17 points and 70.60 points, respectively.

Zimbabwe Stock Exchange (ZSE) Developments

The Top 10 and Top 15 indices lost 4.26% and 3.52% to close at 55 314.05 points and 75 951.92
points, compared to previous week’s positions of 57 773.36 points and 78 721.18 points,
respectively. The resource index, however added 6.07% to close the week at 94 942.74 points
compared to 89 512.59 points recorded in the prior week. Figure 3 shows developments on the
ZSE’s All Share, Top 10 and Mining indices from 12th August 2022 to 11th August 2023.

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

The decline in the mainstream index was attributed to share price losses in SeedCo Limited
(17.94%), ZB Financial Holdings Limited (14.99%), Turnall Holdings Limited (10.45%), Zimre
Holdings Limited (9.45%) and FBC Holdings Limited (8.89%).


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
11-Aug-23
Mining Index
All Share and Top 10 Indices
All Share Index (ZSE)
Top 10 Index
Mining Index

Partially offsetting the aforementioned declines were gains in the share prices of Fidelity Life
Assurance Limited (14.88%), Bridgefort Capital Limited Class B (14.85%), Ecocash Holdings
Zimbabwe Limited (14.36%), Dairibord Holdings Limited (12.45%) and Nampak Zimbabwe
Limited (10.41%). The rise in the resource index emanated from a 6.07% gain in RioZim Limited
share price during the week under analysis.

Market Turnover
During the week under review, the cumulative volume and value of shares traded increased by
106.40% and 0.02% to 31.19 million shares and ZW$10 219.66 million, compared to 15.11
million shares and ZW$10 217.33 million recorded in the prior week, respectively.

Figure 4 shows the trend in daily market turnover for the period 12th August 2022 to 11th August
2023.

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


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
11-Aug-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

Market Capitalisation
Owing to bearish sentiments exhibited on the ZSE during the week under review, the market lost
1.15%, or ZW$110.33 billion worth of capitalization to close at ZW$9 478.66 billion, compared
to ZW$9 588.99 billion registered in the previous week. Figure 5 shows the evolution of market
capitalization for the period 12th August 2022 to 11th August 2023.

Figure 5: Market Capitalization

Source: Zimbabwe Stock Exchange, 2023


Victoria Falls Stock Exchange (VFEX) Developments
The rise in the VFEX mainstream index was a result of share price increases in SeedCo
International (12.22%), Innscor African Limited (7.16%), Simbisa Limited (6.51%), National
Foods Holdings Limited (3.80%) and Padenga Holdings Limited (2.86%). Partially offsetting
the abovementioned increases were declines in the share prices of Bindura Nickel Corporation
(BNC) (13.08%), African Sun Limited (5.00%) and Zimplow Holdings Limited (0.25%).


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
11-Aug-23
$ Billions

VFEX Market Turnover
The VFEX cumulative volume and value of shares traded declined by 35.86% and 27.16% to
1.75 million shares and US$0.46 million, from 2.73 million shares and US$0.63 million,
recorded in the previous week, respectively.

VFEX Market Capitalization
Reflecting the positive momentum on the VFEX during the week under analysis, the market
gained 3.39% worth of capitalization to close at US$1.21 billion, compared to US$1.17 billion
registered in the previous week. Figure 6 shows the trend in the VFEX All Share Index for the
period 12th August 2022 to 11th August 2023

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

7. AN OVERVIEW OF THE 2023 MID-TERM MONETARY POLICY STATEMENT

The recent policy measures put in place by the Bank and Government have re-oriented the
country onto the right track to macroeconomic stability. The policy measures have ushered
stability on the exchange rate and prices. The Bank has resolved to stay the course by maintaining
the tight monetary policy stance for the next six months to December 2023 to sustain the current
macroeconomic stability. To ensure attainment of the full benefits of monetary and fiscal

consolidation to sustainably anchor inflation and exchange rate expectations, policy fine tuning
will be based on open market operations.

Precisely, the liberalisation of the foreign exchange (FX) market through the introduction of the
wholesale interbank market has brought stability in the domestic foreign exchange markets. The
measures have dampened the parallel market foreign exchange rate premium to current
international acceptable levels of about 20%. The correction of the exchange rate to the
equilibrium path saw month-on-month inflation falling sharply to -15.3% in July 2023, down
from a high of 74.5% in June 2023. In the outlook period, annual inflation is expected to continue
on a declining trend for the remainder of the year.

Figure 7 shows the developments on the parallel foreign exchange premium during the period 5
May 2022 to 11 August 2023.

Figure 7 Foreign Exchange Parallel Market Rate Premiums - May 2023 to August 2023


As a result of the positive exchange rate and inflation, the Bank has maintained the current policy
rates which will continue to be reviewed in line with inflation developments. The Bank’s policy
rate has been kept at 150% per annum with the medium-term accommodation facility lending
rate for the productive sectors of the economy at 75% per annum.

The Bank also kept the deposit rates on savings and time deposits unchanged at 30% and 50%
per annum, respectively. The statutory reserve requirements for call deposits in local and foreign

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
4-Aug
11-Aug

currency were unchanged at 15% and 10% while statutory reserve requirements for all savings
and time deposits were also kept unchanged at 5%.

The Bank will continue to use the Non-Negotiable Certificates of Deposits (NNCDs) and gold
coins in physical and digital forms to mop excess liquidity. The Bank fine-tuned its key liquidity
management tool, NNCDs through the introduction of 7, 14, 21, 30-day maturities. This measure
is envisaged to enhance the efficiency of the NNCDs, strengthen the interbank money market
and smoothen liquidity fluctuations in the economy.

The Bank remains confident that the continued sale of gold coins and gold-backed digital tokens
(GBDT) will sustainably take away steam from the store-of-value demand for foreign currency
during the short to medium term, with positive spinoffs on the substance of the obtaining price
and exchange rate stability. The gold coins mopped up over ZW$35 billion from a total of 36,059
coins as of 14 July 2023. Similarly, the GBDT mopped up a total of ZW$50.50 billion equivalent
to 325.02 kg of gold tokens as at 21 July 2023.

To optimise the potential use of GBDT in the economy, the Bank is at an advanced stage in the
preparations for the eventual rolling out of GBDT for transactional purposes in Phase II of the
project under the code or name ZiG, which stands for Zimbabwe Gold. Appropriate awareness
campaigns are being carried out across all national provinces and districts of the country to
educate the public on the use and benefits of GBDT.

Overall, the goal of the Mid-Term Monetary Policy Statement points to the Bank’s commitment
to the current tight monetary policy stance in order to ensure macro-stability characterised by
decline in annual inflation to the year 2023 between 60% and 70%, support the country’s
economic resilience and achievement of the projected economic growth of 5.3% in 2023.

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.


WHOLESALEFX
27-July-23 01- Aug-23 03-Aug-23 08-Aug-23
Total
Bids (US$ dollars)

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
18-July-23 25-July-23 01-Aug-23 08-Aug-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
542,480.15
601,650.01
497,893.08
884,829.72