{"doc_id": "00370906c0d3cea814c6178eb9ce53ab", "text": "Vol. 25 No. 23 \n \n \nWeek Ending \n9th June 2023 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ................................................................................................ 1 \n2. \nINTEREST RATES .................................................................................... 1 \n3. \nCLEARING AND SETTLEMENT ACTIVITY ...................................... 3 \n4. \nTOBACCO SALES ..................................................................................... 5 \n5. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ......... 5 \n6. \nEXCHANGE RATE DEVELOPMENTS ................................................. 7 \n7. \nEQUITY MARKETS.................................................................................. 7 \n8. \nGOLD COINS ........................................................................................... 12 \n \n \n \n \n \n1 \n1. \nOVERVIEW \n \nThis report provides a comprehensive update on the latest developments in the money and capital \nmarkets for the week ending 9 June 2023. The report also covers developments in the tobacco, \nmineral commodities, gold coins and stock markets during the week. The last section of the \nreport presents an analysis of domestic inflation developments. \n \nThe minimum and maximum deposit rates for domestic currency deposits remained unchanged \nat their previous week’s levels during the week ending 9 June 2023. The banks also maintained \nthe structure of deposit rates, short- and long-term deposits, paying higher rates on long-term \ndeposits. The value and volume of ZWL transactions processed through the National Payment \nSystem (NPS) increased, reflecting higher economic activities. The equity markets continued to \ngrow during the week under consideration. \n \nThe volume of tobacco sales as at the end of the week was 55.17% higher than the volume sold \nduring the same period in 2022. The turnover realized from the tobacco sales was 54.9% higher \nthan the US$505.07 million realized during the same period in 2022. \n \n2. \nINTEREST RATES \n \nLocal Currency (ZWL) Deposit Rates \n \nMinimum and maximum deposit rates for domestic currency deposits of all classes remained \nunchanged at their previous week’s levels during the week ending 9th June 2023. Banks \nmaintained higher deposit rates for the longer-term deposits to attract long-term savings needed \nfor lending. \n \n \nTable 1: Average Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit rates (%) \n \n3- Month deposit rates (%) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n12-May-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n19-May-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n26-May-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n2-Jun-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n9-Jun-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n2 \n \nLocal Currency (ZWL) Lending Rates \n \nThe minimum ZWL lending rates for both individuals and corporate borrowers were adjusted \nupwards during the week reflecting higher credit demand for the banks’ low-risk rated clients. \nThe maximum ZWL lending rates were reduced for both individuals and corporate borrowers, \nwhich is positive for the low-end segments of the market. The lending rates were as in Table 2. \n \nTable 2: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n12-May-23 \n75.21 \n106.24 \n85.82 \n168.68 \n19-May-23 \n71.91 \n100.67 \n102.96 \n162.50 \n26-May-23 \n70.02 \n102.96 \n85.40 \n168.68 \n2-Jun-23 \n70.87 \n103.16 \n86.45 \n168.78 \n9-Jun-23 \n72.49 \n102.12 \n88.01 \n167.75 \nSource: Reserve Bank of Zimbabwe, 2023 \n \nForeign Currency (USD) Deposit Rates \n \n \nThe minimum and maximum deposits rates for all classes of FCA deposits remained unchanged \nduring the week ending 9th June 2023, as shown in Table 3. The banks continued to offer higher \ndeposit rates on longer-term FCA deposits to attract long-term foreign currency deposits needed \nto support longer-term lending. \n \n \n \nTable 3: Average Foreign Currency Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit rates (%) \n \n3- Month deposit rates (%) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n12-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n19-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n26-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n2-Jun-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n9-Jun-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n3 \n \n \n \n \nForeign Currency (USD) Lending Rates \n \n \nDuring the week ending 9 June 2023, the USD minimum lending rates increased by 0.02 and \n0.46 percentage points for individuals and corporate clients, respectively. The increases reflect \nhigher demand for loans by the low low-risk clients of the banks. The maximum USD lending \nrates for individual borrowers were reduced by 0.08 percentage points while the maximum \nlending rates for the orate borrowers were increased by 0.19 percentage points during the week \nunder review as shown in Table 4. \n \nTable 4: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n12-May-23 \n11.32 \n12.95 \n8.28 \n14.44 \n19-May-23 \n11.35 \n13.32 \n7.64 \n14.48 \n26-May-23 \n11.34 \n13.12 \n7.95 \n14.52 \n2-Jun-23 \n11.37 \n13.04 \n8.02 \n14.60 \n9-Jun-23 \n11.39 \n12.96 \n8.48 \n14.79 \nSource: Reserve Bank of Zimbabwe, 2023 \n3. \nCLEARING AND SETTLEMENT ACTIVITY \n \nThe value of transactions processed through the National Payment System (NPS) increased \nduring the week under review from ZW$1.74 trillion in the previous week to ZW$2.36 trillion. \nThe Real Time Gross Settlement (RTGS) increased by 39.97% to ZW$2 trillion, during the \nweek. The distribution of the NPS transaction in value terms during the week ending 9 June 2023 \nwas distributed as shown in Figure 1. \n \n \n \n \n \n \n \n \n \n4 \n \n \n Figure 1: Composition of NPS Transactions in Value Terms \n \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n \nThe volume of transactions that went through the NPS during the week under review decreased \nby 3.977% to 12.07 million, reflecting higher economic activity. The lower ATM transaction \nvolumes registered during the week under analysis were partly attributable to Adowntimesmes. \nIn volume terms, the NPS transactions were distributed as shown in Figure 2. \n \n \n Figure 2: Composition of NPS Transactions in Volume Terms \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \nRTGS\n85.16%\nPOS\n6.78%\nATM\n2.71%\nMOBILE\n5.35%\nRTGS\nPOS\nATM\nMOBILE\nRTGS, 2.17%\nPOS, 23.26%\nATM, 1.19%\nMOBILE, 73.38%\nRTGS\nPOS\nATM\nMOBILE\n \n \n5 \nTable 5: National Payment Systems Activity \nPAYMENT \nSTREAM \nWEEK ENDING \n26th May 2023 \n \nWEEK ENDING \n \n2nd May 2023 \n% CHANGE FROM \nLAST WEEK \nPROPORTION \n% \n \nValues in ZW$ Millions \n \n \nRTGS \n1,433,365.50 \n2,006,243.53 \n39.97% \n82.60% \nPOS \n135,753.24 \n159,746.66 \n17.67% \n7.82% \nATM \n63,796.23 \n63,751.71 \n-0.07% \n3.68% \nMOBILE \n102,443.80 \n126,086.93 \n23.08% \n5.90% \nTOTAL \n1,735,358.99 \n2,355,828.84 \n35.75% \n100% \nVolumes \n \n \nRTGS \n312,547 \n262,493 \n-16.01% \n2.17% \nPOS \n2,895,014 \n2,807,194 \n-3.03% \n23.26% \nATM \n169,604 \n143,170 \n-15.59% \n1.19% \nMOBILE \n9,192,031 \n8,857,304 \n-3.64% \n73.38% \nTOTAL \n12,569,196 \n12,070,161 \n-3.97% \n100% \nSource: Reserve Bank of Zimbabwe, 2023 \n \n4. \nTOBACCO SALES \nA cumulative total of 259.10 million kilograms of tobacco had been sold as at 9th June 2023, the \n58th day of the tobacco selling season. The volume of tobacco sales represented a 55.17% \nincrease, compared to the 166.97 million kilograms sold during the same period in 2022. The \nturnover realized from the sales amounted to US$782.33 million and was 54.90% higher than \nthe US$505.07 million realized during the same period in 2022, as shown in Table 6. \n \nTable 6: Weekly Cumulative Tobacco Sales: Day 58 (9th June 2023) \n \n2022 \n2023 \nVariance (%) \nCumulative Quantity Sold (million kgs) \n166,973,588 \n259,098,162 \n55.64 \nAverage Price (US$/kg) \n3.02 \n \n3.02 \n-0.18 \nCumulative value (US$ million) \n475,552,777 \n782,334,436 \n54,90 \n Source: Tobacco Industry and Marketing Board (TIMB), 2023 \n \nThe golden leaf was sold at an average price of US$3.02/kg, during the week under review, up \nfrom US$3.01/kg realized during the same period in 2022. \n5. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS \n \nDuring the week ending 9th June 2023, weekly average international prices for gold and \npalladium remained bearish and marginally eased, while platinum, copper, nickel, and crude oil \nrallied from their previous week’s levels. Table 7 shows developments in prices for selected \ncommodities during the week under review. \n \n \n \n6 \nTable 7: Metal and Crude Oil Prices for the week ending 2nd June 2023 \n \nGold \nPlatinum \nPalladium \nCopper \nNickel \nCrude Oil \n2023 \nUS$/ounce \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nUS$/barrel \nWeekly Average (29 May -02 \nJune) \n1,960.87 \n1,017.30 \n1,410.10 \n8,163.20 \n21,019.00 \n75.02 \n05-June \n1,950.75 \n1,011.50 \n1,417.50 \n8,361.00 \n21,020.00 \n76.54 \n06-June \n1,959.58 \n1,027.00 \n1,407.50 \n8,293.00 \n21,189.00 \n75.89 \n07-June \n1,965.20 \n1,038.50 \n1,414.00 \n8,270.00 \n21,155.00 \n76.25 \n08-June \n1,956.83 \n1,023.00 \n1,381.00 \n8,330.00 \n21,110.00 \n75.70 \n09-June \n1,961.93 \n1,007.00 \n1,337.50 \n8,323.00 \n21,155.00 \n73.73 \nWeekly Average (05- 09 June) \n1,958.86 \n1,021.40 \n1,391.50 \n8,315.40 \n21,125.80 \n75.60 \nWeekly Change (%) \n-0,10 \n0,40 \n-1,32 \n1,86 \n0,51 \n0,78 \nSource: BBC, KITCO and Bloomberg 2023 \n \nGold \n \nDuring the week ending 9th June 2023, gold prices declined by 0.10% to US$1,958.86 per ounce \nfrom US$1,960.87 per ounce in the previous week. Prices were weighed down by an uptick in \nU.S. bond yields as well as a strengthening US dollar. The decline was, however, marginal as \ninvestors awaited inflation data and the outcome of the upcoming Federal Reserve policy \nmeeting for more clarity on the U.S. interest rate path. \n \nPlatinum \nPlatinum prices rose by a marginal 0.40%, from an average of US$1,017.30 per ounce in the \nprevious week to US$1,021.40 per ounce during the week under review. Prices continued to get \nsupport supply shortages owing to power-related disruptions in top producer, South Africa \n \nPalladium \nMeanwhile, palladium prices slumped by 1.32% from a weekly average of US$1,410.10 per \nounce in the previous week to US$1,391.50 per ounce. Palladium prices remained bearish owing \nto weak global industrial demand particularly in the auto sector. \n \nCopper \nCopper prices continued on a positive trajectory following signs of dwindling inventories, \nparticularly in China, the world’s largest metals consumer. Resultantly, the red metal’s prices \nincreased by 1.86%, from an average of US$8,163.20 per tonne to US$8,315.40 per tonne during \nthe week ending 9th June 2023. Prices are, however, expected to remain rangebound before the \nannouncement of the Fed’s rate decision. \n \n \n \n7 \n \nNickel \nNickel prices marginally rose by 0.51% from US$21,019.00 per tonne to US$21,125.80 per \ntonne, supported by robust demand from China and supply disruptions in Indonesia, which have \nlimited global supply. \nBrent Crude Oil \nDuring the week ending 9th June 2023, crude oil average prices rebounded by 0.78% to \nUS$75.60 per barrel, from US$75.02 per barrel recorded in the previous week. Prices recovered \nfollowing an announcement by Saudi Arabia to cut production by one million barrels a day. This \ndevelopment more than offset demand woes stemming from recession fears. \n \n6. EXCHANGE RATE DEVELOPMENTS \n \n \nInterbank Market \nThe Zimbabwe dollar (ZW$) depreciated on the interbank market by 62%, from an average of \nZW$2,362.54 per US$1 in the previous week to ZW$3,825.12 per US$1, during the week under \nreview, as is shown in Table 8. \n \nTable 8: Selected Exchange Rates (ZW$ per unit of foreign currency) \n2023 \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average (29-02 June) \n 2,362.5449 \n 120.6822 \n2,933.2617 \n 171.1219 \n 2,531.1155 \n05-June \n 2,727.0405 \n 139.8601 \n 3,389.4512 \n 198.2010 \n 2,916.9851 \n06-June \n 2,769.9366 \n 144.9275 \n 3,446.7762 \n 201.3092 \n 2,970.7795 \n07-June \n 3,673.7718 \n 192.3077 \n 4,562.2861 \n 266.9540 \n 3,925.9804 \n08-June \n 4,868.5152 \n 259.7403 \n 6,065.9298 \n 357.3691 \n 5,216.8608 \n09-June \n 5,086.3307 \n 273.9726 \n 6,383.6114 \n 375.9524 \n 5,482.8222 \nWeekly Average (05-09 June) \n 3,825.1190 \n 202.1616 \n 4,769.6109 \n 279.9571 \n 4,102.6856 \nAppr (-)/Depr (+) (%) of the ZWL \n61,9 \n67,5 \n62,6 \n63,6 \n62,1 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n7. EQUITY MARKETS \n \n \nZimbabwe Stock Exchange \n \nDuring the week ending 9th June 2023, the Zimbabwe Stock Exchange (ZSE) maintained a \npositive momentum for the eighth consecutive week with the ZSE All Share index gaining \n56.06% to close the week at 175 785.58 points. \n \n \n8 \n \nThe Top 10, Top 15, and Medium Cap increased by 63.39%, 60.22%, 33.31% and 8.16% to \nclose the week at 110 293.27 points, 127 407.23 points, 293 876.79 points respectively. \n \nThe rise in the mainstream index was a result of share price gains in CBZ Holdings Limited \n(101.05%), British American Tobacco Zimbabwe Limited (BAT) (75.09%), ZB Financial \nHoldings Limited (74.05%), Meikles Limited (73.45%) and Delta Corporation Limited \n(71.90%). \n \nPartially offsetting the aforementioned increases were declines in share prices of Zimbabwe \nNewspapers (1980) Limited (26.80%) and Ariston Holdings Limited (5.06%).The increase in \nthe resource index emanated from a 14.28 % increase in RioZim Limited’s share price during \nthe week under review. \n \nTable 8: Zimbabwe Stock Exchange Statistics1 \n \nAll Share \nIndex \nPoints \nTop 10 \nindex3 \n(points) \n \n \n \nMining \nIndex \n(points) \nGrand \nMarket \nCapitalizat\nion (ZWL \nbillion) \nMarket \nTurnove\nr (ZWL \nmillion) \nThe \nvolume \nof \nShares \n(million) \nTop 15 \nIndex3 \npoints \nMedium \nCap3 \n(points) \nSmall Cap3 \n(points) \n \n \n \n29-May-23 \n99,900.00 \n60,847.16 \n28,301.73 \n179,839.67 \n1,026,751.26 \n46,035.02 \n8,275.92 \n2,015.86 \n33,85 \n30-May-23 \n104,183.78 \n63,745.45 \n34,558.62 \n190,360.21 \n1,023 904.93 \n52,765.85 \n8,745.92 \n2,830.79 \n9,60 \n31-May-23 \n108,195.28 \n65,893.9 \n44,713.63 \n200,948.99 \n1,024,954.59 \n52,765.85 \n8,939,06 \n2,989.59 \n20,05 \n1-Jun-23 \n111,427.57 \n67,489.32 \n59 422.95 \n211,205.84 \n1,061,229.76 \n51,236.83 \n9,426.65 \n1,922.75 \n3,11 \n2-June-23 \n112,615.44 \n67,504.61 \n59 422.95 \n220,449.67 \n1,061,229.76 \n50,946.71 \n9,426.65 \n6.682.22 \n80.84 \n9-June-23 \n175,785.58 \n110,293.2\n7 \n127,407.2\n3 \n293,876.79 \n1,001,260.16 \n58,223.29 \n14,618.47 \n41,049.5\n9 \n75,40 \n% Change \n56.09 \n63.39 \n60.22 \n33.31 \n-5.65 \n14.28 \n55.08 \n149.67 \n-6.73 \nSource: Zimbabwe Stock Exchange (ZSE), 2023 \n \n \n \n \n \n \n \n1 The Zimbabwe Stock Exchange (ZSE) adopted the Global Industry Classification Standards, effective from 1 January 2020.The ZSE indices \nconstitute the following categories; Top 10 Index; Top 15; Top 25; Medium cap and Small cap Indices. \n \n \n \n \n9 \nFigure 3 shows the trend in daily market turnover for the period from 27th April 2022 to 9th \nJune 2023. \n \n \nFigure 3: Zimbabwe Stock Exchange All Share and Top 10 Indices \nSource: Zimbabwe Stock Exchange, 2023 \n \n \n \nMarket Turnover and Volume \n \n \nThe cumulative value of shares traded increased by 149.67% to ZW$41.05 billion, despite a \ndecline of 6.73% in the volume of shares traded, amounting to 75.40 million shares. Figure 4 \nshows the trend in daily market turnover for the period from 21st May 2022 to 9th June 2023. \n \n Figure 4: Daily Market Turnover \n \nSource: Zimbabwe Stock Exchange, 2023 \n \n \n \n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\n90,000\n100,000\n27-Apr-22\n21-May-22\n14-Jun-22\n8-Jul-22\n1-Aug-22\n25-Aug-22\n18-Sep-22\n12-Oct-22\n5-Nov-22\n29-Nov-22\n23-Dec-22\n16-Jan-23\n9-Feb-23\n5-Mar-23\n29-Mar-23\n22-Apr-23\n16-May-23\n9-Jun-23\nAll Share Index\nTop 10 Index\n0\n2,000\n4,000\n6,000\n8,000\n10,000\n12,000\n14,000\n16,000\n18,000\n20,000\n21-May-22\n14-Jun-22\n08-Jul-22\n01-Aug-22\n25-Aug-22\n18-Sep-22\n12-Oct-22\n05-Nov-22\n29-Nov-22\n23-Dec-22\n16-Jan-23\n09-Feb-23\n05-Mar-23\n29-Mar-23\n22-Apr-23\n16-May-23\n09-Jun-23\nZW$ millions\nNegotiated deal: 61.16 million Larfage\nCement\nZimbabwe\nLimited\nshares\nexchanged hands at ZW$312.65\nBlock \nTrade: \n19.34 \nmillion \nHippo Valley Estates Limited \nshares \nexchanged \nhands \nat \nZW$247.85/share\nNotable Trades: 31.45 million Ariston \nHoldings Limited shares and 4.26 million \nDelta Holdings Limited shares exchanged \nhands \nat \nZW$15.02/share \nand \nZW$4077/share, respectively. \n \n \n10 \nMarket Capitalization \n \n \nReflecting improved trading activity on the ZSE, largely informed by heightened speculative \ntendencies, market capitalization increased by 55.08%, or ZW$5 191.83 billion worth of \ncapitalization to close at ZW$14 618.85 billion, compared to the previous week’s position of \nZW$9 426.65 billion. Figure 5 shows ZSE market capitalization developments for the period \nfrom 27th April 2022 to 9th June 2023. \n \nFigure 5: Daily Market Capitalization in ZW$ billions \nSource: Zimbabwe Stock Exchange, 2023 \n \n \nVictoria Falls Stock Exchange \n \n \nThe Victoria Falls Stock Exchange (VFEX) was characterised by bearish trading during the week \nending 9th June 2023. Resultantly, the VFEX All Share index lost 0.06% to close at 80.18 points, \ncompared to 80.22 points recorded in the previous week. \n \nThe decline in the VFEX mainstream index was a result of share price losses in First Capital \nBank Limited (23.53%), Africa Sun Limited (7.18%), Axia Corporation Limited (0.62%) and \nPadenga Holdings Limited (0.27%) \n \nPartially offsetting the abovementioned share price losses were gains in the share prices of \nInnscor Africa Limited (6.82%) and Simbisa Brands Limited (1.97%). \n \nThe VFEX cumulative volume and value of shares traded increased by 23.99% and 86.25% to \n2.28 million shares and US$1.09 million. This is in comparison to 1.83 million shares and US$ \n0\n1,000\n2,000\n3,000\n4,000\n5,000\n6,000\n7,000\n8,000\n9,000\n10,000\n27-Apr-22\n21-May-22\n14-Jun-22\n08-Jul-22\n01-Aug-22\n25-Aug-22\n18-Sep-22\n12-Oct-22\n05-Nov-22\n29-Nov-22\n23-Dec-22\n16-Jan-23\n09-Feb-23\n05-Mar-23\n29-Mar-23\n22-Apr-23\n16-May-23\n09-Jun-23\nBillions\n \n \n11 \n0.58 million registered in the previous week, respectively. Market capitalization, declined by \n0.06%, or US$0.75 million worth of capitalization to close at US$1.35 billion, from US$1.35 \nbillion registered in the previous week. Figure 6 shows the trend in the VFEX All Share Index \n(ASI) for the period from 27th April 2022 to 9th June 2023. \n \nFigure 6: Victoria Falls Stock Exchange All Share Index \nSource: Victoria Falls Stock Exchange, 2023 \n \n \n \nJohannesburg Stock Exchange (JSE) Developments \n \nThe Johannesburg Stock Exchange (JSE) All-share index was 0.25% lower to close at 76,936.11 \npoints during the week under analysis. JSE market capitalization also decreased by 1.46% to \nclose at ZAR21.82 trillion during the same period. \n \n \nTable 9: Johannesburg Stock Exchange (JSE) Statistics \nPeriod \nAll Share Index \nMarket Capitalization \n(points) \n(ZAR trillions) \n29-May-23 \n76,613.35 \n22.36 \n30-May-23 \n75,939.46 \n22.34 \n31-May-23 \n75067.47 \n22.35 \n1-June-23 \n75783.25 \n22.49 \n2-June-23 \n77,126.06 \n21.97 \n9-June-23 \n76,936.11 \n21.65 \n% Change \n-0.25 \n-1.46 \nSource:https://www.jse.co.za/services/market-data/market-statistics, 2023 \n \n \n \n \n \n70.00\n80.00\n90.00\n100.00\n110.00\n120.00\n130.00\n140.00\n150.00\n27-Apr-22\n21-May-22\n14-Jun-22\n08-Jul-22\n01-Aug-22\n25-Aug-22\n18-Sep-22\n12-Oct-22\n05-Nov-22\n29-Nov-22\n23-Dec-22\n16-Jan-23\n09-Feb-23\n05-Mar-23\n29-Mar-23\n22-Apr-23\n16-May-23\n09-Jun-23\n \n \n12 \nFigure 7: Johannesburg Stock Exchange (JSE) All Share Index \nSource:https://www.jse.co.za/services/market-data/market-statistics,2023 \n \n \n \n \n8. \nGOLD COINS \n \n A total amount of ZW$42.4 billion had been purchased in respect of the gold-backed digital \ncoins by the 9th of June 2023. \n \nTable 10: Digital Gold-Backed Coin Purchases (Volume and Value) As at 09 June 2023 \n \n \n \n \n \n \n \n 60.00\n 65.00\n 70.00\n 75.00\n 80.00\n 85.00\n14-May-22\n7-Jun-22\n1-Jul-22\n25-Jul-22\n18-Aug-22\n11-Sep-22\n5-Oct-22\n29-Oct-22\n22-Nov-22\n16-Dec-22\n9-Jan-23\n2-Feb-23\n26-Feb-23\n22-Mar-23\n15-Apr-23\n9-May-23\n2-Jun-23\n \nDate \nNumber \nof Bids \nReceived \nValue of Bids \nReceived \nAmount Allotted \nPrice per \nMilligram of \nGold \n \n \n \nZWL \n \n \nRBZ GOLD-BACKED DIGITAL \nTOKENS ISSUE NO. 2/2023 \n 18-May-23 \n104 \n8,063,137,030 \n8,063,137,030 \n112,6 \nRBZ GOLD-BACKED DIGITAL \nTOKENS ISSUE NO. 3/2023 \n 26-May-23 \n105 \n8,500,033,263 \n8,500,033,263 \n152,46 \nRBZ GOLD-BACKED DIGITAL \nTOKENS ISSUE NO. 4/2023 \n 01-Jun-23 \n59 \n4,516,617,361 \n4,516,617,361 \n207,79 \nRBZ GOLD-BACKED DIGITAL \nTOKENS ISSUE NO. 5/2023 \n 08-Jun-23 \n61 \n7,214,378,573 \n7,214,378,573 \n388,01 \nTotal ZWL \n \n461 \n42,371,503,648 \n42,371,503,648 \n \n \n \n13 \n9. \nRECENT EXCHANGE RATE AND INFLATION DYNAMICS \n \n \nThe economy continues to exhibit strong external sector fundamentals as evidenced by persistent \nbalance of payments current account surpluses being registered since 2019 and balanced fiscal \nperformance since 2020. Given the above, the significant depreciation of the local currency \nwitnessed since March 2023 is largely decoupled from conventional economic fundamentals as \nit was also influenced by other dual currency-related dynamics Zimbabwe. \n \nIn a normal mono-currency environment, currency instability usually emanates from structural \nweaknesses in the economy that include unsustainable fiscal and current accounts deficits. The \nresultant monetization of fiscal deficits through financing from the central bank would then \ndestabilize the exchange rate through excessive financial market liquidity. Similarly, \nunsustainable current account deficits may lead to foreign currency shortages that exert pressure \non the exchange rate to depreciate. In addition, high dependency by a country on primary \ncommodities without adequate foreign reserves exposes the exchange rate to adverse external \nshocks and to speculative attacks by rent-seeking. \n \nContrary to the afore-described conventional causes of currency instability, the country’s fiscal \nposition has been sustainably maintained at deficits of below 3% with no recourse to Central \nBank financing since 2020. Similarly, the country has been experiencing favourable external \nbalance as shown by current account surpluses registered since 2019 to date. Precisely, the \ncountry registered foreign currency inflows amounting to US$11.6 billion in 2022, which is the \nhighest in history. Economic growth prospects for the country are positive with growth estimated \nto surpass the initial growth projection underpinning the 2023 National budget of 3.8% in 2023. \nDiaspora remittances have been performing well and outweighing increases in imports to support \ngrowth in manufacturing capacity utilization estimated at 56% in 2022. \n \nThe country also continues to pursue a tight monetary policy stance since the last half of 2022, \nwith moderate increases in the local component of the money supply. Relatedly, the growth in \nlending in local currency has been low since January 2023 which shows that the monetary \nconditions remain tight. Traditionally, the movements in the exchange rate in Zimbabwe have \nbeen closely related to the movements in the local currency component of the money supply. \nThis, notwithstanding, the recent currency instability saw the exchange rate sharply depreciating \nin the face of a merely moderate and normal increase in the local currency component of the \n \n \n14 \nmoney supply. This, somewhat, suggests a possible decoupling of dual currency exchange \ndynamics from money supply growth as shown in Figure 8. \n \nFigure 8: Money Supply and Exchange Rate Developments \n \n \nThe historically observed money supply-exchange rate nexus, therefore, suggests that the \nexchange rate should be much lower at around half of what has been observed in the market. \nThus, the current official and parallel exchange rates have overshot their equilibrium levels and \nare expected to appreciate or at the very least remain stable in the foreseeable future. \n \nGiven the above, the considered view of the Bank is that the current volatility in the exchange \nrate reflects the inherent challenges associated with a dual currency system. In a dual currency \nsystem, economic agents trade in both the USD and the local currency. Foreign currency is \ndemanded for settling both external and domestic transactions and for store-of-value while under \na mono-currency system, foreign currency is mainly reserved for external transactions. Hence \nthe demand for foreign currency under a dual currency system is insatiably high. \n \nOn the supply side, the country experienced a decline in foreign currency receipts due to external \nshocks (declining commodity prices) of key minerals such as the Platinum Group of Metals \n(PGMs) during the period under review. Although the PGMs prices are yet to reverse, the net \neffect on trade flows has since been significantly moderated by the coming in of lithium exports \nand the softening of global petroleum, fertiliser, and other import prices. \n \n0\n100\n200\n300\n400\n500\n600\n700\nAnnual Growth of ZWL Component of M3\nAnnual Depreciation\n \n \n15 \nIt was also observed during the period under review that the quoting of abnormally depreciated \nexchange rates to discourage sales in local currency by some businesses also exerted pressure on \nthe local unit. This came in the form of a sudden decline in the demand for local currency due to \nthe implicit rejection and an equivalent increase in demand for foreign currency for settling \ndomestic transactions. Given, the hysteresis of yesteryear’s hyperinflation, this perpetuated the \nself-fulfilling negative inflation and exchange rate expectations. \n \nGiven that the current exchange rate volatility is not driven by structural factors and persistent \nmoney supply growth, the Bank is aptly confident that the worst patch is over. In addition, the \nrecent measures instituted by the Bank, which include the introduction of the wholesale foreign \nexchange market to address transitory foreign exchange liquidity in the market and the rolling \nout of the second phase of the gold-backed digital coins are expected to buttress exchange rate \nstability in the near to short term. Precisely, intervening in the foreign exchange market through \nthe wholesale auction system is already exerting a dual effect of mopping up excess liquidity and \nre-establishing the optimal mix of the dual currencies, thus ensuing exchange rate stability. Given \nthe above, the Bank encourages all stakeholders, notably retailers, service providers and \nGovernment in all its tiers to accept payments in local currency going forward to boost its \ndemand, critical for fostering exchange rate stability. \n \n \n \n \nRESERVE BANK OF ZIMBABWE \n \n \n16 \n APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR MAINFX2 AND SMEFX 3 \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n2 Main Foreign Currency Auction \n3 Small and Medium Enterprises Foreign Currency Auction \n \nMAINFX \n19-May-23 26-May-23 2-June-2 9-June-23 \n \n SMEFX \n19-May-23 26-May-23 2-June-23 9-June-23 \nTotal \nBids (US$ dollars) \n26,816,031.89 \n54,243,996.14 \n39, 022,401.47 \n22,581,743.16 \n3,558,737.72 \n6,110,283.97 \n4 862 990,77 \n2800317,72 \nAmount Allotted \n(US$ dollars) \n13,171,159.91 \n13,209,099.47 \n13,483,681.07 \n4,158,013,57 \n1,273,163.40 \n957,712.91 \n1 782 414,85 \n829 418,77 \nHighest Rate \n1,600 \n2,001 \n3000,00 \n4,100,00 \n1,525 \n2,100 \n3,100 \n4,100 \nLowest Bid \nRate \n1,351 \n1,801 \n2,500,00 \n3,555,00 \n1,351 \n1,801 \n2,500 \n3,500 \nLowest Bid Rate \nAllotted \n1,351 \n1,801 \n2500,00 \n3,555,00 \n1,351 \n1,801 \n2,500 \n3,500 \nWeighted Average \nRate \n1,404.8039 \n1,888.0119 \n2 577,06 \n3 673,77 \n1,404.8039 \n1,888.0119 \n2,577,06 \n3,673,77 \nNumber of Bids \nReceived \n490 \n469 \n344 \n210 \n569 \n674 \n503 \n298 \nNumber of Bids \nRejected \n7 \n2 \n6 \n5 \n15 \n29 \n2 \n6 \n \n \n17 \n APPENDIX 2: SUMMARY OF FOREIGN CURRENCY AUCTION ALLOTMENTS BY PURPOSE \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nPurpose \nMAINFX \n 19-May-23 26-May-23 2-June-23 9-June-23 \nSMEFX \n19-May-23 26-May-23 2-June-23 9-June-23 \nRaw Materials \n \n7,007,641.38 \n6,799,034.39 \n7,307,910,47 \n2,252,804.85 \n350,687.48 \n288,375.10 \n561,675.79 \n345,922.07 \nMachinery and \nEquipment \n1,926,117.50 \n2,184,686.84 \n1,943,805.17 \n254,261.37 \n415,614.30 \n318,256.50 \n592,242.46 \n260,143.22 \nConsumables \n(Incl. Spares, \nTyres, \nPackaging) \n1,001,696.74 \n778,350.98 \n1,031,283.36 \n105,661.54 \n202,560.71 \n109,719.60 \n180,940.94 \n73,965.28 \nPharmaceuticals \nand Chemicals \n341,262.52 \n401,843.00 \n722,581.17 \n149,967.54 \n62,647.17 \n19,949.30 \n60,805.16 \n38,892.52 \nServices \n(Loans, \nDividends and \nDisinvestments) \n983,240.01 \n552,310.76 \n693,493.70 \n812,609.16 \n100,494.32 \n98,780.03 \n172,061.28 \n84,175.30 \nRetail and \nDistribution \n1,514,194.61 \n \n1,532,656,21 \n200,497.47 \n125,715.23 \n95,177.70 \n151,223.78 \n20,946.22 \nFuel, Electricity \nand Gas \n- \n- \n- \n \n- \n- \n- \n- \nPaper and \nPackaging \n397,007.15 \n788,269.34 \n251,950.99 \n381,211.65 \n15,444.19 \n27,454.68 \n- \n- \nTOTAL \n13,171,159.91 13,209,099.47 13,483,681.07 \n4,158,013.57 \n2,280,785.72 \n1,576,700.13 \n1,273,163.40 \n957,712.91", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_09_June_2023_Volume_26.pdf"}