Working paper Determinants of the Zambian Kwacha John Weeks Oswald K. Mungule November 2013 Determinants of the Zambian Kwacha Study commissioned by the International Growth Centre at the London School of Economics in Partnership with Oxford University John Weeks, PhD Oswald K. Mungule, PhD Professor Emeritus Principal Policy Analyst SOAS, University of London National Economic Advisory Council London Lusaka
[email protected] [email protected] http://jweeks.org Lusaka. September 2013 1 Table of Contents Introduction .................................................................................................................... 3 Chapter 1-Short Run Determinants of the Nominal Kwacha: Implications for exchange policy ............................................................................................................. 4 Executive Summary 1 .................................................................................................... 5 1.1 Introduction .......................................................................................................... 6 1.2 Analytical Framework ......................................................................................... 7 1.2.1 Analytics of Exchange Rate Adjustment ...................................................... 7 1.2.2 The Exchange Rate in Zambia .................................................................... 14 1.2.3 Further Policy Issues of Exchange Rate Analysis ...................................... 17 1.3 Empirical analysis .............................................................................................