Harare - A month after he suspended the payment system, Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono has decided to permit bank transfers to ease demand for cash, state media reported Thursday.

Zimbabwe is experiencing an acute shortage of cash, among other basics, including food and fuel. The situation has forced people to resort to use plastic money for transactions.

Foreign currency dealers use bank transfers to trade near- worthless Zimbabwe dollars for hard currency, because they cannot obtain enough cash for cash transactions.

Gono told the state-controlled daily The Herald his suspension of bank transfers in October was prompted by the "widespread abuse by a breed of selfish and unrelenting money launderers and speculators."

Gono attributes the cash shortages on "high levels of indiscipline in the economy" and again blamed Western sanctions for Zimbabwe's economic nosedive.

Analysts rubbish that theory, pointing out that the European Union and United States sanctions target only President Robert Mugabe and his senior officials and cronies, through asset freezes and travel bans, and not the general population. (dpa)