People have queued to get the new higher denomination banknotes
Zimbabwe's annual inflation rate soared to 66,212.3% in December, according to official figures.
A shortage of fuel and basic goods helped propel the figure up from the 26,740.8% rate recorded for November.
Last year Zimbabwe's chief statistician said it was impossible to work out the country's inflation rate accurately because of the lack of goods in shops.
The country's economic crisis has led to an estimated three million people fleeing the country for South Africa.
About 80% of the population lives in poverty.
Government attempts to try and slow inflation have included setting maximum prices for some goods, and introducing price freezes.
But some producers, fearing making a loss, cut production, meaning the move exacerbated shortages and left shop shelves empty.
There has also been currency devaluation and the introduction of a $200,000 note.
Queues have formed at banks to get the new notes - which - when introduced - could buy 1kg (2.2lb) of sugar.
In the last month, the black market exchange rate has risen from Z$2m to the $1 to Z$7.5m to the $1.
Critics have blamed President Mugabe's policies, especially the seizure of farms, for ordinary Zimbabweans' hardship.
But President Mugabe has accused foreign governments of trying to interfere in Zimbabwe's affairs - saying some businesses had raised prices without justification as part of a Western plot to oust him.
Mr Mugabe is standing for re-election next month against three confirmed challengers.