Zimbabwe police have launched a massive crackdown on illegal traders in the second city of Bulawayo in the face of chronic foreign currency shortages, a newspaper reported yesterday.

The private Standard paper said armed police seized foreign currency as it was being traded on the black market in the southern Zimbabwean city.

"There were serious clashes when police confiscated some goods from vendors and forex dealers at the Renkini Bus Terminus as police swooped down on anyone they suspected to be dealing in foreign exchange," one eyewitness told the paper of an "ongoing exercise" in Bulawayo and the capital Harare, but could not confirm recent arrests.

The crackdown comes amid a chronic shortage of foreign currency needed to buy food, medicine and fuel.

The government blames the shortages on the flourishing black market, where foreign currency such as the US dollar trades for up to seven times its official value of 824 to one Zimbabwe dollar.

Clement Moyo, a board member of human rights group ZimRights said yesterday that he witnessed the police action at the Bulawayo bus terminus on Friday afternoon.

He said scores of armed riot police sealed off the bus terminus and arrested a number of suspects.

He said those who were arrested were likely to have paid a fine and had any foreign currency on them confiscated.

Meanwhile the state-run Sunday Mail newspaper said government officials had been sent to the northern border town of Chirundu to stop Zimbabwean money from being smuggled into neighbouring Zambia.

The paper said Zimbabwean business people trade Zimbabwe dollars on the black market in Zambia.

Cross-border traders are blamed by the government for Zimbabwe's chronic banknote shortages, which reached crisis levels earlier this year.

The shortages of local banknotes have eased in recent weeks, but the Sunday Mail said newly printed Zimbabwe money was still being smuggled out to buy foreign currency in Zambia at "reasonable rates" for resale back home on the black market. – Sapa-AFP.