President Asif Ali Zardari has appointed Acting Governor Yaseen Anwar as Governor State Bank of Pakistan.
Official sources have confirmed that appointment of Yaseen Anwar as new governor of SBP.
He assumed the duties on an interim basis three months ago after the former governor of SBP resigned citing "differences of opinion on policy actions.
" Anwar's appointment makes him the fourth central bank chief in Zardari's government, reflecting the difficulties Pakistan has had in attracting and retaining officials in government service.
Anwar also has aggressively - and unexpectedly - cut the key policy rate by 200 basis points to 12 per cent since July, leaving analysts puzzled and concerned that the move, aimed at spurring growth, may end up widening the deficit and spurring inflation in the fragile economy.
The rate cuts have also led to some analysts questioning the bank's independence, especially since the main beneficiary of lower rates would be the cash-strapped government.
Debt-laden Pakistan is also under pressure from a depreciating rupee which makes it harder to repay foreign loans, the country's main source of income to keep its economy afloat.
In 2008, Pakistan and the International Monetary Fund agreed on a three-year package loan for $11 billion.
But the program was halted in 2010 because of slow implementation of fiscal reforms, and only $8 billion had so far been disbursed.
The program ended on September 30 and Pakistan opted out of asking for a new loan.
Islamabad has to start repaying the loan in early 2012 and that's when the pressure on foreign exchange reserves will increase.