Money Supply, Payments Inflation and the Balance Zambia 1970 1980

Mutale, Oliver Henry (1983) Money Supply, Payments Inflation and the Balance Zambia 1970 1980. Masters thesis, University of Zambia.

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In Zambia, since independence in 1964, the factors that have influenced the magnitude and dir~ction of money supply are principally three: the balance of payments, the government expenditure and domestic credit. The formulation of monetary policy, very largely depends on the origin of the change in money supply. For instance, monetary developments that are associated with favourable balance of payments and surplus in the government budget, are viewed with little concern by the monetary authorities. This was the case during the early years of independence 1964 to 1970. During this favourable period, there were no undue restrictions on bank credit to the private sector and government borrowed insignificant amounts from the banking system. In spite of the rapid increases in money supply, the prices remained fairly low and stable because the domestic output was growing steadily. Since 1970, the monetary policy has been primarily concerned with containing the ill effects of the deterioration in the balance of payments. The deterioration has drastically weakened the financial position of both the mining companies and the government. As a result the Government finances most of its expenditure by money creation. Central Bank credit to the Government usually exceeds credit to the rest of the economy, due to the credit restrictions imposed on this sector from time to time. Monetary developments in the Zambian economy do reflect these credit patterns,

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HF Commerce
Divisions: Africana
Depositing User: Geoffrey Obatsa
Date Deposited: 01 Feb 2019 09:42
Last Modified: 01 Feb 2019 09:42

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