THE debt-saddled Reserve Bank is to lay off 1,600 workers -- three quarters of its staff -- in a bid to balance its budget, officials said.

Gideon Gono, the governor of the Reserve Bank of Zimbabwe, who was widely blamed for presiding over rampant printing of the now abandoned local dollar which ended in hyperinflation, said only 530 jobs would be kept.

"We are looking at retrenching 74 percent of the central bank's staff," Gono told the official Herald newspaper. "It is not one of the easiest tasks as it is going to be one of the largest retrenchments in the history of the country by a single institution."

In March, the International Monetary Fund (IMF) said the bank needed a new board to strengthen governance, adopt a sustainable budget, and refocus its role after abandoning the Zimbabwean dollar in 2009.

Gono said most of those likely to lose their jobs had served for more than 30 years. Employees recruited when the bank undertook various non-banking activities at the height of Zimbabwe's economic crisis will also be fired.

"We are currently saddled with a huge debt that strictly speaking belongs to the government, which stands at US$1.2 billion," he said.

Gono, as the bank's chief, was renowned for introducing new Zimbabwean dollar notes in astronomical denominations causing hyperinflation as the economy spiralled downwards amid political turmoil, but he remains at the helm.

His presence as the bank's chief remains one of the major sticking points in the unity government between veteran President Robert Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara.

Zimbabwe's economy grew by 4.7 percent last year, ending 12 years of contraction during which inflation hit world record levels.

Finance Minister Tendai Biti said last month that the economy would grow by 9.3 percent in 2011 due to improved tobacco production and higher mining output.