This paper reviews the monetary policy framework and implementation in Zambia since 1992. The paper argues that the thrust and orientation of monetary policy after 1992 has been towards market-based instruments of monetary control. In the process, it has been possible to reduce inflation from three-digit figures to an average of about 23 per cent over the past three years. However, formidable challenges, in terms of reducing inflation further and establishing a stable and sustainable macroeconomic environment, still lie ahead.

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