SBP governor resigns, FBR chairman dismissed from post

State Bank of Pakistan (SBP) Governor Tariq Bajwa resigned from his post on Friday after the Prime Minister Imran Khan required his resignation, while Federal Board of Revenue (FBR) Chairman Jehanzeb Khan has been dismissed.

According to The Express Tribune, the next head of the central bank is most likely to be Dr. Reza Baqir who is currently working at the International Monetary Fund (IMF).

The resignation of Tariq Bajwa has been confirmed from his office.

The removal of the governor of the central bank is not in the powers of the prime minister, however, in certain circumstances it can be defined in the SBP Acot of 1956.

Bajwa’s statutory tenure serving as the governor of the central bank would have ended on July , 2020.

Furthermore, Jehanzeb Khan, is likely to be replaced by a Customs Service Group official, Tribune reported.

No response were explained behind the move from the office of Dr. Abdul Hafeez Shaikh, who is currently serving as the Adviser to the PM on Finance.

The governor of the SBP did not resisted government’s decision since the country’s predominant macroeconomic conditions, Tribune reported.

PM Imran Khan has already made changes in his cabinet ministers and unceremoniously removed Asad Khan from his post as the finance minister.

Dr. Baqir who is expected to be taking as the new SBP governor has graduated from Harvard University; a PhD in economics from the University of California, Berkeley; worked with the World Bank, the Massachusetts Institute of Technology and the Union Bank of Switzerland; has remained the IMF’s head of mission in Romania and has been working with the world leaders as the head of its debt policy division, for the past two decades.

The new governor will have multiple challenges lying ahead of him including a negotiation for a bailout package to implement conditions on the monetary policy and exchange rates.

Meanwhile, the replacement of the new FBR chairman most likely occurred due to the inability of Jehanzeb to effectively run the FBR which was facing a record shortfall of Rd345 billion in just 10 months of this fiscal year.

Asad Umar formal finance minister, and the current Minister of State for Finance Hammad Azhar also wanted to replace Jehanzeb.