Celebrations about the return of the United States dollar as legal tender in Zimbabwe may be premature.

Inside sources say Reserve Bank of Zimbabwe governor, John Mangudya, jumped the gun by announcing the return.

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.”

He added that the move by the government was an act of desperation by a regime that was on its knees.

“So the regime’s opaque attempt to re-dollarize marks the desperate act of a desperate regime that is literally on its knees,” he said.

“With the closure of Beitbridge, dwindling diaspora remittances, the collapse of the #SMP, fuel & energy crises, #COVID19, grain shortages, the regime is in crises.

“Re-dollarization will not mask or obviate the need for genuine structural reforms in Zimbabwe, nor the imperator to resolve the crises of legitimacy. It will not hide the genuine need for a lasting political settlement. Nor will it hide the regime’s gross incompetence and abuse of power.

“#COVID19 has exposed the regime for what it is, a bungling incompetent corrupt gang of thugs masquerading as a government.”

It is not clear what will happen to Mangudya if it turns out that he announced yesterday’s measures without the agreement of the Monetary Policy Committee.

Mangudya is less than a year into his second and final term which was renewed on 1 May last year.

Mthuli Ncube appointed a nine-member Monetary Policy Committee in September last year in a move that was widely seen as trying to rein in Mangudya.

According to the Herald the MPC’s functions entailed determining the monetary policy of Zimbabwe; including the setting of limits on open market operations by the bank and ensure price stability as defined by the Government’s inflation target in the national budget.

It would also determine interest rates in line with the Government’s economic policies and targets for growth and employment creation as well as other monetary policy functions, as the finance minister may prescribe by way of regulations.

The paper said that according to the Reserve Bank of Zimbabwe Act, the committee submits its findings to the board of the central bank but this is for information purposes only.

Mangudya chairs the MPC and his two deputies are also members.