The Reserve Bank of Zimbabwe has said it will step up monitoring of all but the smallest cash transactions, in the hope of stopping bank notes disappearing from circulation.

Growing demand for large volumes of cash - used, officials say, for untraceable money-laundering operations - has reportedly left big bank notes in short supply.

The Bank has set up a Financial Intelligence Unit to track suspicious cash transactions, and may push forward plans to introduce a new 1,000-Zimbabwe-dollar note, twice the size of its current biggest denomination.

Economic spiral

The Bank's taskforce will look at all transactions in excess of 500,000 Zimbabwe dollars.

At official exchange rates, that is over US$9,000 (£5,700), but on the black market, the Zimbabwe dollar is trading at around 1,800 in the US currency - and falling fast.

Inflation is rampant in Zimbabwe: it hit an annual 140% at the last count, which means many Zimbabweans have to deal in ever larger quantities of cash.

The weak Zimbabwe dollar has left the country short of vital imported goods, which in turn has pushed prices up still further.

At the same time, the authorities also allege rampant money laundering, as rich individuals attempt to spirit their liquid assets out of the country.