The new regime does not intend on extending the current State Bank Governor Dr. Reza Baqir’s tenure beyond his scheduled retirement date.
In a conversation with GEO NEWS, Defence Minister Khawaja Asif said the current central bank governor, Dr. Reza Baqir, will retire on schedule, and the government has no intention of keeping him. “His term is about to end and we will not retain him,” he confirmed.
Asif also said the coalition government will reverse the SBP (Amendment) Act, 2021, but would allow the central bank independence over future monetary policy decisions. When asked if he would convey this to Prime Minister Shehbaz Sharif, he said, “I will definitely ask him to do it”.
It may be recalled that following the previous government’s agreement with the International Monetary Fund (IMF) to renew its $6 billion loans, it agreed to empower the central bank with an autonomous status.
For this purpose, the SBP Act, 1956, was revised through the SBP (Amendment) Act, 2021, to improve central bank autonomy, price stability, and accountability.
In case of a reversal, talks with the IMF will most likely be in jeopardy as it would contradict the global lender’s loan terms which were earlier agreed upon in exchange for granting SBP full autonomy in setting policy directions and inflation targets for the country.