A BANK says one of its automated teller machines dished out defunct Zimbabwe dollars when it was being repaired.

Technicians tested it with the old currency and left it online in error.

Witnesses said Wednesday the incident caused "panic" among irate bank customers in downtown Harare on Tuesday and rumours quickly spread that the local currency was back in circulation.

Zimbabwe abandoned its own currency in 2009 and adopted the U.S. dollar to halt world record inflation and end the use of huge denomination local bills in millions, billions and trillions during the nation's decade-long economic meltdown.

In a statement Wednesday, the Interfin bank said it took back the local bills and it regretted any inconvenience caused to customers.