Inside sources say Reserve Bank of Zimbabwe governor, John Mangudya, jumped the gun by announcing the return yesterday.
In a statement yesterday Mangudya said the US dollar was being brought back to deal with the coronavirus which has so far claimed one life.
He also said that the managed float exchange rate had been abandoned and the Zimbabwe dollar was now fixed at 25:1 against the US dollar.
“There is no going back to the United States dollar,” a source said. “The revised position will be announced on Monday with the legal instruments.”
Critics say that policy flip-flops like this one do not augur well with potential investors.
Mangudya’s measures announced yesterday were a reversal of those announced by Finance Minister Mthuli Ncube on 11 March, which according to the British government were recommended by the International Monetary Fund whose nod opens doors for international investment.
Former Finance Minister Tendai Biti, who has been arguing against de-dollarisation, said that he has repeatedly told the government that this will not work.
“The regime has radically done a volte face& sneakily re-dollarised. We told them it wouldn’t work & won’t work. They owe Zimbabwe an apology and they should now bring a Bill to Parliament formally repealing those sections of the Finance Act that incorporated SI33 & 142of 2019,” he tweeted.
“Public policy must be consistent, predictable &for the public good .It surely can’t be the business of Government to disrupt people’s lives.
“If the business of a gvt becomes that of disrupting its citizens then that gvt should have no business in the citizen s business #Shame.
“The confusion around monetary policy &the mismanagement of FX in Zim reflects structural incompetence &indifference. Undoing this dog’s breakfast will be a nightmare.”
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