Khawaja Asif hints at reversing SBP autonomy before Miftah Ismail-IMF talks

ISLAMABAD: In a surprise statement before Miftah Ismail-IMF talks, Pakistan Muslim League Nawaz (PML-N) central leader and defence minister Khawaja Asif has said that the government will go for reversing the autonomy of the State Bank of Pakistan (SBP).

Defence Minister Khawaja Asif Thursday reiterated concerns over the autonomy granted to the State Bank of Pakistan (SBP) during the PTI-led government’s tenure, Geo News reported.

In the wake of the previous government’s agreement with the International Monetary Fund (IMF) for reviving its $6-billion loan, it had committed to granting autonomous status to the central bank. For this purpose, the SBP Act, 1956 was amended through the SBP (Amendment) Act, 2021, for enhanced central bank autonomy, price stability, and accountability.

He made the statement during an interview with Geo News’ programme “Capital Talk”.

Big news. Defense Minister of Pakistan ⁦⁦@KhawajaMAsif⁩ claimed that his Govt will reverse the law which gave control of State Bank to the IMF . He accused ⁦@ImranKhanPTI⁩ for surrendering the economic sovereignty of Pakistan to IMF. pic.twitter.com/yjtzqXNsGk

— Hamid Mir (@HamidMirPAK) April 21, 2022

It may be noted that Finance Minister Miftah Ismail has reached Washington for talks with International Monetary Fund (IMF) which will continue until April 24.

Governor State Bank of Pakistan (SBP) Reza Baqir is already in London for talks with the IMF and in case of successful talks, the Fund would release a tranche of US$1 billion.

Asif said that he still believes the laws that the previous government amended to meet the IMF’s conditions were still wrong and needed to be reversed.

Before IMF talks, Miftah Ismail hints at ending PTI’s financial relief package

The defence minister said former prime minister Imran Khan had “sold out” Pakistan’s economic sovereignty to the United States, as Washington has the most shares in the IMF. “IMF is an institution in which America has a lot of stakes as it is the largest shareholder. Imran Khan sold out our economic sovereignty to them as he handed over our central bank — our bank of the last resort — to the IMF,” he said.

The defence minister said the coalition government would reverse the move and reestablish Pakistan’s economic sovereignty, but noted that the central bank would be given independence when it comes to the monetary policy.

When asked whether he would raise the concerns with Prime Minister Shehbaz Sharif, he said: “I will definitely ask him to do it.” The defence minister also assured that the Governor of the State Bank of Pakistan Dr Reza Baqir would retire on his designated date and the government has no plans of retaining him. “His term is about to end and we will not retain him,” he added.

Miftah Ismail

The newly-appointed Finance Minister Miftah Ismail had hinted at reserving the Pakistan Tehreek-e-Insaf (PTI) financial relief package prior to departing for Washington to hold renegotiation with the International Monetary Fund (IMF).

The newly appointed Finance Minister Miftah Ismail had departed for Washington on Wednesday seeking the revival of the $6 billion International Monetary Fund (IMF) programme signed by the PTI government.

While addressing a press, Miftah Ismail had said that IMF will be sought to revive the loan programme and lessen the financial burden on the nation. He said that the IMF is not accepting the subsidy on petrol and electricity.

The new government is looking for an appropriate time to take a U-turn on the financial relief package announced by former prime minister Imran Khan on February 28. The finance minister had signalled that the government could no longer adhere to the decision to subsidise Rs5 per unit on electricity and Rs22 on petrol and Rs52 on diesel.