Pakistan Names Wathra Third Central Bank Chief in Four Years

Pakistan confirmed Ashraf Mahmood Wathra as central bank governor, the third person to hold the job in four years, as the nation overhauls the economy to meet conditions on an International Monetary Fund loan.

Wathra will stay in the post for three years, State Bank of Pakistan’s media coordinator Muhammad Khubaib Usmani said by phone yesterday. He had been acting governor since January after Yaseen Anwar resigned for personal reasons.

“He’s a suitable man for the job,” said Saad Khan, an economist at the Karachi-based broker Arif Habib Ltd. “He has dealt with both the IMF and the government and provides the right balance between the two.”

Wathra kept the key policy rate unchanged at 10 percent on March 15 as easing inflation and rising foreign reserves stem a slide in the currency. Prime Minister Nawaz Sharif is trying to revive South Asia’s second-largest economy, which has been hurt by chronic power shortages and a Taliban insurgency.

Foreign reserves held by the central and commercial banks will rise to $15 billion by end-September from a one-year high of $11.8 billion this month, according to official estimates.

Pakistan raised $2 billion in April through its first international bond sale in seven years and another $1.13 billion from the April 23 auction of mobile-phone spectrum licenses. It also expects inflows from donor agencies such as the World Bank and Asian Development Bank.

IMF Review

Rising reserves helped stem the rupee’s worst slide since 2008. The currency has rebounded 7.3 percent this year, the best performance among all Asian peers tracked by Bloomberg.

Pakistan’s inflation rate will stay at about 8.5 percent to 9.5 percent in the year through June 30, the central bank forecasts, after rising to 10.9 percent in November. First-half economic growth accelerated to 4.1 percent from 3.4 percent a year earlier, Finance Minister Ishaq Dar said April 16.

Pakistan and the IMF are due to conduct the next review tomorrow on a $6.6 billion loan secured in September under a three-year facility to help avoid a balance-of-payments crisis. An earlier, partially disbursed $11.3 billion IMF program expired in September 2011 after Pakistan failed to meet the conditions attached to it.

Performance in the current program is “mostly positive,” the Washington-based lender said in its latest review report published last month. The IMF wants Pakistan to make the energy sector more competitive, rein in the fiscal deficit and boost revenue.

Banking Experience

Pakistan’s budget shortfall in the eight months through February narrowed to 3.1 percent of gross domestic product from 4.1 percent a year earlier, Dar said March 12. The full-year target is 6.3 percent in a nation where official estimates peg the tax-to-GDP ratio at 8.8 percent, one of the lowest in the world.

Wathra has 35 years of banking experience, according to the central bank’s website. He joined the monetary authority as deputy governor last year after being senior executive vice president at the National Bank of Pakistan, the nation’s second-largest lender by assets.

His predecessor Anwar resigned after about two years, while the previous Governor Shahid Hafiz Kardar left after about 10 months over what he said were differences with the government on economic policies.

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