Pakistan Central Bank Governor Quits as Forex Reserves Dwindle

Pakistan central bank Governor Yaseen Anwar resigned, the third to quit the post in four years, weeks after the International Monetary Fund faulted the bank for failing to stem a slide in foreign-exchange reserves.

The resignation was accepted effective Jan. 31 and a decision to appoint an acting governor will be made tomorrow, Finance Minister Ishaq Dar said yesterday in a statement in Islamabad. Anwar resigned for personal reasons, especially after his son’s accident last week in Singapore, central bank spokesman Umar Siddique said by phone.

Anwar’s resignation came as Pakistan tries to revive a fragile economy with the help of a $6.6 billion IMF loan approved in September, while tackling energy shortages and a Taliban insurgency that’s impeding efforts to boost growth and attract foreign inflows. The government plans to raise as much as $500 million in its first overseas bond sale since 2007, according to Finance Minister Ishaq Dar.

“I don’t see this having very negative fallout on the market per se,” said Sayem Ali, an economist at Karachi-based Standard Chartered Plc. “But the growth story could suffer, a lot of investment that was likely to come might get delayed. The Euro Bond, which was expected to be floated in a couple of weeks, might get delayed.”

The IMF pointed to central bank authorities this month for failing to do enough to prevent reserves from dwindling. Reserves held by the central bank have fallen 62 percent to $3.18 billion from a year earlier, central bank data show. The rupee has fallen 7.9 percent against the dollar over the past year, according to data compiled by Bloomberg.

Prime Minister Nawaz Sharif, who gained power for a record third time in May is trying to revive growth, which averaged 3 percent in the past five years. The economy may expand 3 percent to 4 percent in the year to June, the central bank said Jan. 15, topping an IMF estimate of 2.5 percent to 3 percent.

Anwar was an acting governor before he was appointed as governor in Oct 2011. He quit over “differences” with the government, private channel ARY News said yesterday, citing unidentified people.

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