Exchange Rate Regimes in Zambia : A quest for an appropriate exchange rate regime (1964 - 2011)

Determining the most appropriate exchange rate regime continues to be intriguing and challenging to many countries both developed and developing. It is thus not surprising to see diversity in the exchange rate regimes in the world today. Different prescriptions have been offered to the developing countries at various points in history from both the experts and rookies alike. However, there remains no panacea regime that can address the various developmental challenges that are faced by countries such as Zambia. The author reviews how Zambia and the rest of the developing community has performed under the different regimes prescribed to it not only in times of peril and great economic deprivation, but also in times of success. He further identifies the flaws inherent in each regime choice and finally proposes an exchange rate regime that identifies and appreciates the nature of the economic problems and intrinsic economic fundamentals surrounding the appropriate exchange rate regime choice for a country like Zambia.