KABUL -- Afghan President Hamid Karzai said Wednesday his government would replace its troubled afghani currency with new banknotes, in a bid to bring stability to volatile exchange markets.

The new currency, which will still be called the afghani, will be worth 1,000 of the current currency, Karzai said in an address filmed at the presidential palace which is to be shown on state television.

Two planeloads of the new notes have already been flown into Kabul after being printed in Germany, and the exchange with the old notes will begin soon, AFP reported.

"People will be proud that they will be able to use the new afghani in all corners of Afghanistan," Karzai said. "The new money will have value and in the exchange markets it will be stable and credible."

Karzai said that Afghan and foreign experts had been debating for the last eight months how best to reduce the large amount of money currently in circulation.

There are three versions of the afghani currently in circulation which are all legal.

One version of the note which is in use in northern Afghanistan is worth just a half of the currency which is used in the rest of the country.

Another note is also in use in a small corner of north-eastern Afghanistan, dating back from the time when the region remained in the hands of the Northern Alliance while the rest of the country was ruled by the Taleban.

"The new banknotes have been printed and have been brought to the country. They have been registered in the Da Afghanistan Bank (Central Bank) and are ready for distribution," the president added.

"With this decision we can control the large amount of money in circulation and take steps towards stabilizing our economy. "The value of the afghani will go higher in the bazaar and people will have more trust in the afghani."

The new notes will be in units of 1,000, 500, 100, 20, 10, five, two and one. They feature pictures of famous historical sites and mosques.

The operation to exchange the old notes for new is expected to last for two months. There will be at least 75 exchange points throughout the country, while afghans will also be able to change their notes at exchange markets.

"After the exchange (process has been completed) the old money will be burnt by the Da Afghanistan Bank and will no longer be valid," said Karzai.

Central Bank Governor Anwar Ul-Haq ahady told journalists afterwards that the move was designed to bolster the value of the afghani. One dollar is currently worth around 40,000 afghanis but the exchange rate fluctuates markedly.

"We want a currency that has a large value so people don't have to take large piles of banknotes to engage in relatively small transactions," Ahady said.

The move was designed to create "a more conducive environment for economic growth and economic activity", he added.

The International Monetary Fund's (IMF) Managing Director Horst Kohler said the move demonstrated the government's "commitment to implement sound fiscal and monetary policies".

"The decision ... is an important step in their efforts to establish macro economic stability and to create an environment that is conducive to restoring sustainable economic growth in Afghanistan," he said in a statement.

shop receives the latest information about different currencies at the exchange market in Kabul, Afghanistan.