ISLAMABAD - SBP Governor Yaseen Anwar stepped down on Thursday as he had serious differences with Finance Minister Senator Ishaq Dar over the economic and monetary policies.
“The federal government has accepted the resignation of State Bank of Pakistan (SBP) Governor Yaseen Anwar with effect from January 31, 2014, said Finance Minister Muhammad Ishaq Dar .
Finance Ministry officials said one of Anwar’s two deputies would temporarily fill his post. The decision regarding acting governor of the central bank will be made today (Friday), according to an official handout issued by the finance ministry.
According to the SBP Act 1956, “At any time when the office of governor is vacant, the federal government may appoint an acting governor provided that the office of governor shall be filled in within a period not exceeding three months.”
Yaseen Anwar was appointed as SBP governor during the tenure of Pakistan Peoples Party. He took the charge of his office on October 20, 2011 for a three-year term and his tenure was to be completed on October 20, 2014. Sources informed that Yaseen Anwar had serious differences with the incumbent government’s economic team over several issues.
A finance ministry official said that Finance Minister Senator Ishaq Dar was particularly uncomfortable with the outgoing governor . Yaseen Anwar, on the other hand, too was unhappy with some of the government decisions; especially he had reservations over the recent appointments in the central bank. A deputy governor had recently been appointed reportedly without his consent.
The resigned SBP governor was also under severe pressure for last few months due to his failure to control the soaring inflation. Moreover, he could not formulate policy to protect the declining foreign exchange reserves of the country, which are still dwindling despite government’s entering into International Monetary Fund (IMF) loan programme.
The government had two options to send Yaseen Anwar packing; to send him on long leave or force him to resign. There were rumours from last one week that the governor has quit the job and left for Singapore, but Yaseen was denying it saying he had gone to Singapore in a hurry as his son got injured in an accident a few days ago.
Sources informed that the PML-N government would start working for appointment of a regular governor of the bank after the upcoming talks with the IMF, starting from February 1, for the second economic review under extended fund facility. The acting governor , to be appointed today, would represent Pakistan in the IMF talks.
Reuters adds: Senior officials in the foreign ministry said the “personal reasons” cited by the finance ministry for Anwar’s resignation were a cover for differences with finance minister Ishaq Dar . “They have completely different views on how to tackle rising inflation and falling foreign exchange reserves,” said one official, requesting anonymity as he was not authorised to speak on the issue.
Another official said Anwar was unhappy with last week’s appointment of Saeed Ahmed as deputy governor of the central bank. One of Anwar’s two deputies, Ahmed and Ashraf Wathra, will assume acting control of the State Bank.
Anwar, 62, was the fourth central bank chief and he was appointed when the previous governor too resigned citing differences of opinion on policy. Anwar had previously served as the bank’s deputy governor . Anwar has 33 years’ of banking experience in cities including New York, London and Paris, and has worked at American banks JP Morgan, Bank of America and Merrill Lynch. His departure reflects the difficulties Pakistan has had in attracting and retaining qualified officials in government service.
Last year, the IMF saved Pakistan from a possible default by agreeing to loan it $6.7 billion over three years after it promised to privatise loss-making state institutions, reform a faltering energy sector, expand Pakistan’s tiny tax base and cut government borrowing. Pakistan’s economy has grown on average 3 percent a year for the last five years and is beset by high unemployment, frequent power cuts, sectarian bloodshed and a Taliban insurgency.