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By Nelson Banya

ZIMBABWE'S move to introduce higher denomination banknotes to end cash shortages fall short of solving the crisis, analysts said on Thursday, as consumers besieged banks ahead of the Christmas holidays.

The southern African country is facing an acute economic crisis blamed on President Robert Mugabe's policies, marked by the world's highest inflation and shortages of fuel and food.

Official inflation is nearly 8,000 percent, although independent economists say the figure could be double that.

In a televised address on Wednesday, Zimbabwe's central bank Governor Gideon Gono introduced higher value notes in Z$750,000, Z$500,000 and Z$250,000 bills to help ease a cash crunch that has seen long queues at banks.

Gono -- who blames the shortage of banknotes on rampant black market trade -- said the central bank would withdraw the Z$200,000 note, previously the highest note in circulation and mostly used by illegal foreign currency traders, with effect from January1.

Analysts said the new banknotes, the highest of which cannot buy a loaf of bread costing at least Z$800,000, were only a temporary solution.

"It's just a temporary measure...the huge demand for cash will always be there as long as inflation remains high and there is more activity in the informal economy, as opposed to the formal sector," said Best Doroh, an economist at ZB Financial Holdings.

"Short of dealing with that, any solution is going to be short-lived."

Research analyst Rashid Mudala said the country's diminished productivity and high inflation would render the measures inadequate.

"They can print as many notes as they want, but inflation will continue to wreak havoc," Mudala said. "The focus should be on inflation and ensuring the productive sector runs efficiently."

Meanwhile, there was no immediate respite for Zimbabweans wanting cash who formed long queues in the rain on Thursday, with most banks in central Harare saying they still had not received the new notes from the Reserve Bank of Zimbabwe.

"There is no improvement, the banks keep saying they have not yet received any new notes," a security guard manning a bank cash machine told Reuters.

"The situation is worse because even more people have come out for cash today expecting new notes, while some shops are reluctant to take the Z$200,000 notes."

Zimbabweans also have to grapple with shortages of food, electricity, and foreign currency, signs of an economic crisis blamed on Mugabe's policies such as the seizure of white farms to resettle landless blacks.

Mugabe, 83, and in power since independence from Britain in 1980, denies mismanaging the economy and says it has been sabotaged by western nations as punishment for his land reforms.

The veteran leader is seeking re-election in a vote planned for March next year. - Reuters

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