Mnangagwa urged to review some of the measures announced by central bank last week

President Emmerson Mnangagwa is being urged to review some of the measures announced by the Reserve Bank of Zimbabwe last week which include the bringing back of the United States dollar and the pegging of the Zimbabwe dollar against the greenback.

The government has already regularised trading in the US dollar through an amendment that was gazetted on Sunday.

A source told The Insider last week that central bank governor John Mangudya had jumped the gun by announcing the measures he did on 26 March.

“There is no going back to the United States dollar,” the source said. “The revised position will be announced on Monday with the legal instruments.”

There was no such announcement yesterday, but instead the exchange regulations were amended through a government gazette on Sunday.

The source, however, said a meeting was held yesterday and a delegation was sent to meet the President.

The source declined to say what was discussed or what the delegation would be asking Mnangagwa to do.

Some members of the Monetary Policy Committee like Eddie Cross have argued that the US dollar should be allowed for some trades so that it gets into formal circulation.

“We have formalised the use of the RTGS dollar and our paper currency and today over 90 per cent of all transactions are made in these currencies in domestic markets,” he said a month ago.

“The talk of re-dollarisation is simply a lack of understanding, we are de-dollarising our economy but recognising this will take years, not months.

“We have to re-establish confidence in our own currency and our ability to protect and maintain its real value. So long as people think it is not a safe vehicle for savings, people will retreat to the US dollar as a store of value – just like gold in previous centuries.

“The reality is that there is much more US dollar cash in our economy than our own currency. We are trying to remedy that but it takes nearly a year to get a new currency designed and printed and put into circulation. In the meantime, the existing currency actually trades at a 30 per cent premium in local markets over the RTGS dollar.

“It is even widely traded in neighbouring States. So the State has decided to slow down the process of de-dollarisation and to allow people to use their own foreign funds on the domestic market. This will tap into the very considerable volume of hard currency that is being traded in the informal economy and assist us in meeting demand for essential imports.”

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