After years shortages of fuel and basic commodities, Zimbabwean's now face a lack of banknotes, the state-run Herald newspaper has reported.

The paper said queues outside banks and cash machines were now as common-place as at petrol stations and supermarkets.

Bank officials said reserves of the 500 Zimbabwe dollar note - the largest denomination worth about 33 US cents - had run out due to high demand before the Christmas break.

Zimbabwe has failed to control runaway inflation and the black market currency exchange rate is about Z$1,500 to the dollar compared with the official rate of Z$55 to the dollar.

The newspaper also said the lack of foreign currency reserves meant the government could not import paper to print new banknotes.

Economic trouble

Zimbabwe is in the grip of its worst economic crisis since the end of white rule 22 years ago.

Official inflation, calculated on a limited basket of goods, is 175% but the rate is probably much higher due to the black market which is outside the government's price controls.

President Robert Mugabe's land redistribution policies have been blamed by many analysts for the economic crisis.

About half the population reportedly face starvation in the coming months after government seizures of commercial farms caused a steep fall in production in what was once known as the bread basket of Africa.

Zambian trade

One bit of good news was the lifting of a ban on cheap Zimbabwean imports by Zambia on Sunday.

Zambia had been overrun with cheap goods by traders using US dollars to buying in Zimbabwe and then re-sell locally, undercutting Zambian producers.

But the Zambian government has introduced duties to protect its local industries.

Zambia's commerce minister Bates Namuyamba said all imports from Zimbabwe would be valued on Zimbabwe's black market exchange rate as opposed to the official exchange rate.