Today, two senior government officials of Pakistan disclosed that the governor of the Pakistani Central Bank and the chairman of the tax collection body has been sacked. It comes as yet another setback to the efforts to tackle economic turmoil.
The dismissal of the two officials comes only weeks after Asad Umar, the Finance Minister of the country, was asked to step down amid the vital bailout talks with the International Monetary Fund. It suggested that the government wants to overhaul its financial team amid soaring inflation and weakening growth rates.
A source from the Finance Ministry disclosed: “The government has decided to remove the governor of the State Bank and the chairman of FBR,” He was referring to Tariq Bajwa, the State Bank of Pakistan Chairman, and Jahanzeb Khan, the Federal Bureau of Revenue Chairman. A source at the office of the prime minister confirmed that both had been sacked.
However, Abid Qamar, the Central bank spokesperson said that Bajwa had “resigned,” and that it was unclear who would be replacing him.
Bajwa was appointed governor in 2017 during the tenure of the previous government. He was considered as one of the key figures in the ongoing bailout negotiations of Pakistan with the IMF.
He was also seen to be close to Ishaq Dar, the former finance minister of Pakistan who appointed him and who championed a “strong rupee” policy that many analysts charge for the current economic woes of Pakistan, including its ballooning budget and current account deficits.
The IMF is urging Pakistan to embrace a more flexible rupee policy to end repeated boom-and-bust cycles, with several analysts saying that the local currency is overvalued.
The government of Imran Khan, the Pakistani premier, has also been frustrated by the low tax collection rates during its first year in office, with the disappointing numbers threatening the promises of Khan to build a welfare state for the poor.
Last March, the central bank slashed its economic growth estimates, forecasting that the economy would expand by 3.5 to 4 percent in the 12 months to the end of June, well short of a government target of 6.2 percent.