ZIMBABWE’S bankrupt central bank is to retrench 85 percent of its bloated staff complement to help it function once again as a reliable national bank.

According to Finance Minister Tendai Biti, the layoffs will mark the end of what analysts say was the use of the Reserve Bank of Zimbabwe (RBZ) to prop up President Robert Mugabe’s party after years of misrule exhausted the country’s finances and led to economic collapse in 2008.

“There are about 2,600 employees but the board will reduce the staff to around 400,” Biti was quoted as saying in the State-run Sunday Mail newspaper.

He said the lay-off was the result of new legislation to restrict the bank’s operations to managing monetary policy, monitoring the banking industry and to act as lender of last resort.

The bank’s money was used to pay for handouts to Zanu PF party members, and to buy vehicles , fuel and other goods which were distributed to the party faithful.

To maintain this spending, money was printed as fast as the bank presses could produce it, resulting in inflation of 500 billion percent and the abolition of the national currency last year. — Sapa