people it is our conviction that the number of zambians to have access to banking services will increase. we therefore encourage as many zambians as possible to use these facilities. to the residents of chilenje, i urge you to utilize the services offered by barclays bank, otherwise the bank may opt to close its branch due to lack of business and you will be left with no bank in your area. you must recognize that the era of keeping monies in mattresses is long gone. we recognize that barclays has obviously seen a window of opportunity in opening its branches in such localities. however, it is important to note that the level of incomes in such areas is not at the same levels as for those that obtain their services from high street locations. in this regard, we urge barclays and other banks opening their branches in these communities to design suitable products. the banks should structure the related costs such that they take into account the lower income status of their clients. i have in mind the withdrawal of small sums of money without necessarily charging for the withdrawals. the challenge of extending access to financial services to the remaining adult population still remains, and for this unbanked population cost is a major consideration. ladies and gentlemen, i am aware that the demand for banking services is high in chilenje and therefore barclays bank should consider moving to bigger premises. there are a number of longstanding neighbourhood businesses in this location. i can point at sir jack, janu plaza, karibu bakery and robert ’ s fish and vegies. there are also business entities which were formally parastatals located here. i also know that private entities that have a national presence such as zambeef plc and pama meats have established branches here. this is a reflection of the economic viability of chilenje township and barclays has done well to come here. ladies and gentlemen, as you are aware the zambian economy has taken a turn for the better over the last few years. we are fortunate that the rise in copper prices has created a greater interest to invest in the mines. we have also witnessed increased investment in other areas such as agriculture, tourism, construction and manufacturing. this has culminated in a 25. 6 % increase in non - traditional exports to us $ 845. 1 million by november 2007. this obviously gives a wider spread of lending opportunities for the banking sector. it is important to note that this growth in non - traditional exports is to a large extent associated with

plan, facilitated the establishment of a credit reference bureau which collects information on borrowers to be used by credit providers. furthermore, in order to increase competition in the financial sector the bank of zambia has registered a number of commercial banks and other financial institutions to operate in zambia. in 2009, the number of registered banks increased from 14 to 17. in addition, the bank of zambia is developing a framework to migrate from the use of monetary aggregates as the anchor of inflation expectations to the use of interest rates. inflation expectations are fundamental to the process of interest rate determination and low inflation expectations are entrenched not only by the implementation of appropriate monetary and fiscal policies at any given time, but also by past inflation developments. low inflation expectations were becoming entrenched in 2008 following two consecutive years of single digit inflation in 2006 and 2007. however, towards the end of 2008, the increase in food prices and the impact of the global financial crisis caused inflation to increase to a double digit figure of 16. 6 %. in spite of this, the prospects for low inflation, now look positive, creating an appropriate environment for interest rate reduction. mr president, as you may have noticed from the newspapers in the recent days, a number of banks have reduced their lending base rates though not as much as we would like to see. we hope that this is just a start, and that banks will continue adjusting their rates downwards consistent with developments in other macroeconomic indicators. distinguished members, allow me to comment on the statutory instrument regarding the us $ 5000 over the counter limit on deposits. these regulations are meant to encourage the use of the banking system in order to assist in curbing money laundering. doing away with this would deprive the central bank of a mechanism for detecting fraudulent activities and create a healthy environment for money to be laundered in our financial system. ladies and gentlemen, the bank of zambia recognises the importance of long term finance for growth. we are also aware of the important role that the development bank of zambia and others institutions that provide long term finance can play in this process. it is for this reason that the bank of zambia monitors the performance of these institutions to ensure that they are financially viable to be able to play this important role. rather than thinking of government recapitalising these institutions, we should think more in terms of developing the capital markets to enable these institutions raise resources for long term financing from the private sector. on the issue of the foreign exchange market, i wish to emphasis