Analysis of Money Movements and Liquidity

 

Report Period : Early to Mid-October 2026

Data Source: Reserve Bank of Zimbabwe (RBZ) Weekly Economic Highlights (Week ending 2nd October 2026 & Week ending 9th October 2026)

Summary

During the period spanning 1st October to 9th October 2026, the Zimbabwean economy exhibited mixed monetary trends.

• Money Movements & Settlement Activity: Total National Payment Systems transaction value experienced a 6.76% contraction in the second week (falling from ZiG 58.85 billion to ZiG 54.87 billion) after a 9.16% surge at the end of September/beginning of October. Transaction volumes, however, continued an upward trajectory, rising 2.97% to ~24 million transactions, led primarily by low-value mobile payment channels.
• Money Growth: Moderate asset/market growth was observed across equity markets (ZSE Market Cap +2.25%, VFEX Market Cap +7.39%). However, real broad money velocity slowed due to sharp drops in high-value RTGS clearing streams (-11.13%).
• ZiG Market Liquidity: Tight/Constrained. High borrowing rates (up to 47.83% for individuals and 43.81% for corporates) alongside declining RTGS settlement values (-18.35% for ZiG) reflect tight local currency liquidity maintained by monetary authorities to anchor exchange rate stability.
• USD Market Liquidity: Relatively Liquid & Active. High transactional volume, significant capital movements on the VFEX ($10.61M turnover), and stable multi-currency RTGS usage indicate robust foreign currency circulation, though foreign currency lending rates remain elevated (up to 25.54% for individuals).

Analysis of Money Movements & National Payment Systems

The flow of funds across the National Payment Systems (NPS) highlights shifting payment behaviors across digital and formal banking platforms between the week ending Oct 2 and Oct 9.

Clearing & Settlement Trends

Payment Stream	Value: Oct 2 (ZiG)	Value: Oct 9 (ZiG)	Value Change (%)	Volume: Oct 2	Volume: Oct 9	Volume Change (%)
RTGS (Total)	45.72B	40.63B	-11.13%	287,744	203,575	-29.25%
— Of which ZiG	20.07B	16.39B	-18.35%	97,265	66,758	-31.36%
— Of which USD (ZiG Eq.)	25.64B	24.24B	-5.48%	190,479	136,817	-28.17%
POS	3.29B	3.32B	+0.96%	2,159,184	2,182,845	+1.10%
ATM	2.61B	2.02B	-22.45%	290,098	226,145	-22.05%
Mobile Banking	372.96M	475.65M	+27.53%	418,384	412,737	-1.35%
Mobile Money	6.40B	7.89B	+23.23%	19,712,352	20,486,501	+3.93%
ZIPIT Mobile	461.88M	536.35M	+16.12%	436,102	483,633	+10.90%
TOTAL	58.85B	54.87B	-6.76%	23,303,864	23,995,436	+2.97%

Key Observations:

1. Contraction in High-Value Clearing: The total value processed via RTGS fell significantly by 11.13% (with ZiG RTGS dropping 18.35%). This contraction indicates subdued wholesale/interbank money transfers or corporate liquidity preservation during the second week of October.
2. Surge in Retail & Mobile Micro-Transactions: While institutional settlement slowed, retail money velocity rose. Mobile Money (+23.23% in value), ZIPIT (+16.12%), and Mobile Banking (+27.53%) surged, accounting for over 90% of total payment volumes (dominated by Mobile Money at 20.48 million transactions).

Money Growth & Capital Markets Performance

Equity Markets (ZSE & VFEX)

• Zimbabwe Stock Exchange (ZSE – ZiG Denominated):
  • All Share Index: Fell slightly by 0.83% (from 480.19 to 476.22 points) in the week ending Oct 9, following a 3.07% gain in the prior week.
  • Market Capitalisation: Expanded by 2.25% week-on-week to ZiG 109.93 billion (up from ZiG 107.51 billion).
  • Market Turnover: Soared by 429.62% to ZiG 246.43 million, driven heavily by block trades in TN Cybertech Investment Holdings and Delta Corporation.
• Victoria Falls Stock Exchange (VFEX – USD Denominated):
  • Market Capitalisation: Increased by 7.39% to US$ 9.01 billion in early October, bolstered by capital growth in West Properties (+20%), Seed Co International (+8.27%), and Invictus Energy (+7.36%).
  • Turnover: Settle at US$ 10.61 million (following a massive spike to US$ 49.50 million in the first week of October due to major stake changes in Econet Infraco and Edgars Stores).

Conclusion on Money Growth: Asset values in both local currency (ZSE) and foreign currency (VFEX) demonstrated expansion. Broad domestic liquidity growth remains controlled, preventing inflationary spillovers while accommodating selective equity investments.

Market Liquidity Analysis

A. ZiG Market Liquidity: Tight & Controlled

1. Interest Rates Structure:
   • Deposit Rates: Savings deposit rates remained static at 4.35% (min) – 4.71% (max). 1-month and 3-month term deposit rates hovered around 13.46%–13.69%.
   • Lending Rates: Commercial bank weighted lending rates for ZiG remained elevated:
     • Individuals: 42.26% – 47.83%
     • Corporates: 34.13% – 43.81%
     • Mortgages: Up to 50.00%
2. Liquidity Assessment:
   • High borrowing costs (34%–48%) coupled with a sharp weekly reduction in ZiG RTGS transaction values (-18.35%) demonstrate that ZiG liquidity in the banking system is tightly restricted.
   • Exchange Rate Impact: This tight stance successfully supported the local currency: ZiG appreciated by 0.30% against the US Dollar, moving from an average of ZiG 26.8083 per USD (week ending Oct 2) to ZiG 26.7271 per USD (week ending Oct 9).

B. Foreign Currency (USD) Market Liquidity: Active & Healthy

1. Interest Rates Structure:
   • Deposit Rates: USD savings yield 2.15% – 2.50%, while 12-month deposits reach up to 9.69%.
   • Lending Rates:
     • Corporates: 9.88% – 16.13%
     • Individuals: Minimum 14.04%, Maximum elevated at 25.54%
     • Mortgages: 10.00% – 18.00%
2. Liquidity Assessment:
   • Strong USD Inflows & Circulation: USD-denominated RTGS transactions represented 59.3% of total RTGS payment values (ZiG 24.24 billion equivalent out of ZiG 40.63 billion total).
   • Capital market activity on the VFEX ($10.6M+ weekly turnover) and stable corporate lending rates (~9.88% min) confirm that USD liquidity remains available and active for corporate financing and commercial trade, though individual retail credit remains costly.

Summary 

Market Indicator	Trend (Oct 1 – Oct 15, 2026)	Liquidity / Growth Status
Broad Money Growth	Moderated	Controlled money supply expansion
ZiG Exchange Rate	Appreciated 0.30% (ZiG 26.72 / USD)	Supported by monetary tightening
ZiG Market Liquidity	Restrictive / Tight	High lending rates; low ZiG RTGS velocity
USD Market Liquidity	High / Liquid	Strong multi-currency transaction volumes
Capital Markets	Capitalisation Up (+2.25% ZSE / +7.39% VFEX)	Positive market depth & asset growth

eof

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### Summary of Analysis
1. **Is there money growth?** Asset capitalisation on the ZSE and VFEX grew (+2.25% and +7.39% respectively). However, overall broad money velocity in the formal banking channel experienced a temporary slowdown due to reduced RTGS settlements.
2. **ZiG Liquidity:** Remains **tight**. High local currency lending rates (up to 47.83%) and decreased ZiG RTGS values reflect strict liquidity controls, which succeeded in firming up the ZiG exchange rate by 0.30% against the USD.
3. **USD Liquidity:** Remains **robust and healthy**, accounting for the majority of transaction values across national payment systems and supporting significant capital market trades.