Govt appoints ex-IMF official Dr Reza Baqir as new SBP governor

ISLAMABAD: The federal government on Saturday appointed Dr Reza Baqir – a Pakistani economist working for the International Monetary Fund (IMF) – as the governor of the State Bank of Pakistan, as Islamabad seeks to finalise a bailout package from the global lender.

"The President of Pakistan is pleased to appoint Dr Reza Baqir as Governor State Bank of Pakistan (SBP) for a period of three years from the date he assumes office," read a notification from the government issued late Saturday night.

A Harvard and Berkeley University of California alumnus, Dr Baqir has been with the IMF since 2000 and is presently the Fund's senior resident representative in Egypt. He has previously served as the head of the IMF Mission for Romania, and as Head of the Fund's Debt Policy Division.

Baqir's appointment comes a day after Tariq Bajwa resigned from the post of SBP governor.

Meanwhile, the key position of the chairman of the Federal Board of Revenue (FBR), the country's main tax collection body, also fell vacant on Friday after the removal of Jahanzeb Khan.

The key appointment of the SBP governor comes only weeks after Finance Minister Asad Umar was asked to step down amid vital bailout negotiations with the IMF, suggesting the government wants to overhaul its financial team amid weakening growth rates and soaring inflation.

Last month, Prime Minister Imran Khan appointed Dr Abdul Hafeez Sheikh as Adviser on Finance in place of Umar, as inflation rose to its highest in six years.

The IMF is pushing Pakistan to embrace a more flexible rupee policy to end repeated boom-and-bust cycles, with many analysts arguing that the local currency is overvalued. The government has also been frustrated by the low tax collection rates during its first year in office, with the disappointing figures threatening the prime minister's promises to build a welfare state for the poor.

The central bank in March cut its economic growth estimates, forecasting the economy would expand 3.5 to 4 percent in the 12 months to the end of June, well short of a government target of 6.2 percent. The IMF paints a gloomier picture, predicting growth of 2.9 percent in 2019 and 2.8 percent next year.

Pakistan’s consumer price inflation in March rose to its highest since November 2013, hitting 9.41 percent year-on-year, before easing to 8.82 percent in April.