Question

An exchange rate regime is the way a monetary authority of a country or currency union manages the currency in relation to other currencies and the foreign exchange market. An exchange rate regime is closely related to that country's monetary policy (Wikipedia). The International Monetary Fund (IMF) classifies exchange rate regimes based on members' actual, de facto arrangements which may differ from officially announced arrangements.

Required:

report on the effectiveness of exchange rate regimes and in your report, include the following:

i.A description of the different classifications of exchange rate regimes;

ii.A historical perspective on the exchange rate regimes from the 18^th Century to modern times;

iii.A historical perspective of the exchange rate regime in Zambia from pre-independence times to modern times;

iv.Comment on the effectiveness of the respective exchange rate regimes with an emphasis on a developing economy like Zambia.