Zimbabweans queued for food outside a store in Harare in April. The economy, plagued by the world's worst inflation, has been in shambles for years. (Associated Press)

Beset by political chaos and runaway price inflation, Zimbabwe is stripping 10 zeros off its nearly worthless currency so that 10 billion dollars becomes a dollar, news agencies reported Wednesday.

The country's central bank chief, who announced the move in a television broadcast, said the big numbers were causing problems for computer systems, the BBC said.

"The Zimbabwe dollar will be redenominated by a factor of one to 10, which means we are removing 10 zeros from our monetary value," Gideon Gono, governor of the Reserve Bank of Zimbabwe, said in the broadcast. "Ten billion dollars today will be reduced to one dollar."

Computers, calculators and automated teller machines have been unable to handle basic transactions in billions and trillions of dollars, the Associated Press reported, adding that Gono just last week introduced a 100-billion-dollar note that is not enough to buy a loaf of bread.

A man holds a new 100-billion-dollar note introduced in Zimbabwe July 22. The inflation-plagued country is taking 10 zeros off its currency, making that note equal to a $10 bill. (Tsvangirayi Mukwazhi/Associated Press)

The new currency numbering takes effect Aug. 1 with the issue of a 500-dollar bill equivalent to five trillion now. Zimbabwe's official inflation rate, highest in the world, is 2.2 million per cent a year.

Meanwhile, South African President Thabo Mbeki is heading to Zimbabwe as talks to end the country's political crisis falter, the Associated Press said.

Mbeki is acting as mediator in negotiations between Zimbabwe's irascible president, Robert Mugabe, and the main opposition leader, Morgan Tsvangirai, who seemed poised to win power in March before a long and controversial vote count went in Mugabe's favour.

Mukoni Ratshitanga, a spokesman for Mbeki, said the South Africa leader would meet with Mugabe on Wednesday afternoon. Mbeki met Tsvangirai in South Africa on Tuesday, he said.

Mugabe and Tsvangirai agreed last week to power-sharing talks to end months of state-sponsored electoral violence that has killed more than 150 opposition activists.

The talks are reported to be deadlocked over Tsvangirai's role in a new government, but Mbeki insisted Tuesday the talks are going well.

With files from the Associated Press