Pakistan Central Bank Governor’s Term Ends, Successor Unknown

(Bloomberg) -- Pakistan's finance minister Miftah Ismail announced in a Twitter post Tuesday that State Bank of Pakistan Governor Reza Baqir's three-year term will expire on May 4. The government did not announce a replacement or say when Baqir's successor will be announced.

The decision comes amid an economic crisis and political shakeup that ended the four-year run of former cricket star Imran Khan as prime minister. Khan was ousted in a parliamentary no-confidence vote in April and replaced with Shehbaz Sharif. Baqir, a former official at the International Monetary Fund, was appointed by Khan in 2019.

The new administration is seeking to restore assistance from the IMF, which has been in limbo since 2020 after the government failed to meet certain conditions.

Talks are scheduled to start in May with the lender over conditions to unlock billions of dollars in loans, which may include doing away with subsidies on fuel and electricity, moves that could further stoke inflationary pressures but would help shore up government finances.

The country faces dwindling foreign reserves, a falling currency and rising current account deficit. Baqir led the central bank's decision in early April to raise interest rates by 250 basis points, the biggest hike since 1996, to help stem Asia's second-fastest inflation.

Ismail said officials have had “positive” talks with the fund for the resumption of loan program. The IMF has “largely agreed” to extend the current program for another year, but details would be worked out during a mission visit to Pakistan in May.