is lost, damaged or stolen as the credit card statement can vouch for the fact that you bought the item even in the absence of the original receipt ; • it helps you build a credit line which can be used by the credit reference company to support your creditworthiness when applying for a loan ; and bis central bankers ’ speeches • in the case of emergencies, a card can become handy in paying for requirements which may be completely outside your budget. these are some of the basic conveniences of credit cards which will come about with the extensive use of this instrument in this country. apart from the cardholders, credit cards have other wider advantages which impact on the greater economy. from our perspective as a central bank, we are keen to promote the use of non - cash and more efficient payment systems for its convenience, flexibility and security. we consider it as one of the instruments that can contribute to the promotion of financial inclusion as has been clearly demonstrated in other countries where cards are a common tool for the settlement of financial transactions. in the united states, for instance, 80 % of households have at least one credit card. in zambia, with the growing emphasis on trade within the regional economic groupings like sadc and comesa, plastic money in the form of credit cards, is a very practical way of facilitating settlement of cross border transactions. another benefit which may be associated, with the more extensive use of e - money is the potential increase in tax compliance among the retail and wholesale sectors. the use of credit cards generates accurate records of purchases which currently may not be captured by the zambia revenue authority because business houses may declare false figures. with the use of a credit card there is no provision to cheat the taxman by refraining from issuing a receipt as the record of the transaction will speak for itself. whilst on the subject of greater tax compliance, i would want to see some form of requirement for most businesses to use points of sale terminals and other non - cash forms of payment in our shopping malls and central business district businesses where we see a resistance from businesses to embrace this technology in favour of cash. but let me end my remarks this evening by pointing out a number of problems and challenges that might be associated with the use of credit cards. the biggest disadvantage of credit cards is that they encourage the holders to spend money they don ’ t have. if the credit card does not require that you pay off your balance each month, this balance will accumulate. the longer you wait to settle, the more

$ 8. 5 million in the similar period this year. exchange rate volatility and domestic inflation the global financial meltdown caused a contagion effect to our foreign exchange market and led to volatility in the exchange rate of the kwacha against major currencies. this unfavourable development was partly a consequence of reduced earnings from copper exports arising from the fall in copper prices as reflected in the lower supply of foreign exchange on the market by mining companies. for instance, the supply of foreign exchange to the market by mining companies declined by 35. 7 % to a monthly average of us $ 62. 4 million in the first half of this year from an average of us $ 97. 0 million in the last half of 2008. in addition, the weakness of the local currency was a consequence of increased risk aversion to emerging and developing economy financial assets, as stated earlier, attributed to the deepening global financial crisis. in this regard, the supply of foreign exchange by foreign portfolio investors for the purchases of kwacha financial assets, such as government securities and domestic company equities, declined significantly, with most non - residents preferring to liquidate their investments and externalising the foreign exchange. the result of this is the volatility in the exchange rate of the kwacha against major foreign currencies. in the last quarter of 2008, the kwacha depreciated by 26. 9 % to trade at an average of k4, 394. 76 / us $ ( boz mid - rate ) from an average of k3, 462. 00 / us $ in the third quarter. it should also be noted that the depreciation of the kwacha against major currencies partly contributed to higher inflation, particularly as zambia remains dependent on imports for a wide variety of consumer goods as well as inputs for domestic production. further, this unfavourable development had a strong role in shaping inflation expectations. in q4, 2008 boz made net sales of foreign exchange to the market of us $ 127. 6 million, whilst in q1, 2009 boz made net sales of us $ 208. 5 million, in a continued effort to minimize exchange rate volatility. this meant utilizing international reserves to calm the foreign exchange market. tourism sector contracted apart from mining and related companies that were affected by the effects of the global recession, tourism was also negatively impacted. the number of foreign tourists visiting zambia declined owing to