Zimbabwe's central bank has announced that three zeroes will be removed from every bank note in an attempt to help consumers deal with hyperinflation of almost 1,200 percent.

Central Bank Governor Gideon Gono said this new agreement, effective since Tuesday, will give Zimbabweans three weeks to exchange all existing banknotes for the new version of notes.

"Our currency is in trouble. Our people are experiencing incredible hardships and inconveniences associated with too many zeroes, Gono said in a televised monetary policy review according to New Zimbabwe.

All monetary values ... have been re-based by striking out three zeroes, he said.

Gono has also cut the lending rate from 550 percent to 300 percent in an effort to salvage what economists have described as the fastest shrinking economy in the world.

The country's inter-bank exchange rate will be adjusted to 250 Zimbabwean dollars, which amounts to 250,000 of the old Zimbabwean dollars, to the US dollar.

The previous exchange rate stood at 101,195 Zimbabwean dollars to the US dollars, which means the currency, has experienced a devaluation of 60 percent.

Zimbabweans were forced to carry around heaps of bank notes with them, even for the most basic transactions such as buying bread. This dilemma also caused problems with accounting programs on software as it could not process transactions, or store data accurately.

Zimbabwe introduced bills known as bearer checks in 2003 to temporarily act as legal tender. The highest denomination was 100,000 Zimbabwean dollars which is the equivalent to less than one US dollar. Gono has also declared these checks are invalid and that they need to be exchanged within three weeks starting from Tuesday.

The government has announced a National Economic Development Priority Programme in April this year in order to introduce further reforms in attempts to control the country's surging inflation rate.

Inflation Zimbabwe