Gideon Gono, governor of the Reserve Bank, said a 50,000 Zimbabwe dollar bill, worth 52 US cents (43 euro cents), will be released Feb. 1, with a whole new range of bills to follow later in the year.

The biggest note currently in circulation is for 20,000 Zimbabwe dollars, worth 20 US cents (16 euro cents). With inflation running at 586 percent, that note buys only half a loaf of bread and is no longer sufficient for a local daily newspaper.

Gono did not provide additional details about the new bills in a review of fiscal policy broadcast on state television.

Zimbabwe's economy has collapsed since the government began seizing thousands of white-owned commercial farms for redistribution to blacks in 2000. Years of drought have compounded the country's difficulties. Inflation is soaring and the value of the currency plummeting.

Stores, restaurants and other businesses have frequently appealed for notes of up to 500,000 Zimbabwe dollars (US$5; euro4) or one million Zimbabwe dollars (US$10; euro8) to reduce the bagfuls of notes needed for routine transactions.

Shoppers carrying bundles of currency bound with elastic bands, known as "bricks," that do not fit in purses or pocket books, are a common sight. There are no coins in circulation.

Gono said the central bank was taking steps to curb the depreciation of the Zimbabwe dollar by linking it to the volume of currency traded daily with a 2 percent cap.

In October, the central bank abandoned a fixed exchange rate of 26,000 Zimbabwe dollars to the U.S. dollar, allowing the rate to fall to 96,000 last week, a rapid fourfold devaluation that spurred inflation.

Gono warned inflation was expected to peak at between 700 percent and 800 percent in March and urged the nation "not to panic."

He said the only cure for hyperinflation was greater productivity and the eradication of rampant corruption. He also blamed ill-disciplined government spending, profiteering and inefficiency in public utilities, which pushed up taxes and municipal charges.

Gono urged authorities to crack down on lawlessness on farms, which has disrupted production, and said Israeli experts had been hired to investigate smuggling of minerals, including gold, one of the nation's main foreign currency earners.

The central bank also plans to appoint a body to investigate "corporate governance" that will include retired executives, retired Judge George Smith and David Phiri, a former governor of the central bank of neighboring Zambia.