SBP gets new governor

ISLAMABAD: The federal government Saturday appointed new heads of the State Bank of Pakistan and Federal Board of Revenue (FBR) to effectively deal with the challenges of weakening growth rates and soaring inflation.

Dr Reza Baqir has been appointed as Governor State Bank of Pakistan (SBP) for three years a day after the removal of his predecessor Tariq Bajwa.

A notification issued by the Finance Division said the President of Pakistan in pursuance of Section 10 (3) of State Bank of Pakistan Act 1956 was pleased to appoint Dr Reza Baqir as Governor SBP for a period of three years from the date he assumes the office.

The terms and conditions of his appointment will be notified later with the approval of President of Pakistan, the notification concluded.

Dr Baqir, a Pakistani economist, has been working with the International Monetary Fund (IMF) since 2000.

Dr Baqir, a Harvard and Berkeley university alumnus, is currently 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.

According to Geo News, the government has decided to appoint Ahmed Mujtaba Memon as the FRB chairman. The position fell vacant on Friday after the removal of Jehanzeb Khan, the chairman of the tax collection body.

Memon comes from the Pakistan Customs Service and is presently an additional secretary in the Finance Division.

The key appointments come 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.