State Bank of Pakistan: Yaseen Anwar appointed as governor

Published: October 19, 2011

His colleagues say the Wharton-educated acting State Bank Governor Yaseen Anwar, is not an avid contributor at meetings and is far more reserved. PHOTO: FILE

ISLAMABAD: The government has appointed the acting governor of State Bank of Pakistan Yasin Anwar as the central bank’s chief.

Three names were considered for the post including Anwar, Ali Raza and Dr Shamshad Akhtar.

The government was required to appoint a new governor before October 18 as Anwar’s tenure as interim head of the body ended yesterday.

The post had been vacant since Shahid Hafeez Kardar resigned from the post on July 18.

Updated from the print story (below) 

Acting governor poised to take over as chief

In the race to the top at the central bank, the insider appears to have won.

The federal government has decided to appoint a dual nationality holder, Yaseen Anwar, as State Bank governor, informed sources told The Express Tribune.

Currently serving as the acting governor of the SBP, Anwar has beaten two other contenders, National Bank of Pakistan chairman Ali Raza and former SBP governor Shamshad Akhtar, and would shortly be notified the 17th governor of the central bank, and the fourth governor in three-and-a-half years of the incumbent government.

News of Anwar’s prospective appointment elicited a mixed reaction, with some experts viewing it as a successful attempt to whitewash financial affairs of the present government. As acting governor since July 18, Anwar has reduced the key interest rate by 2% – a move widely interpreted as an attempt to appease industrialists as general elections approach.

Anwar would succeed Shahid Hafiz Kardar, who resigned on July 15 after developing “serious policy differences” with the federal government.

(Read: Resignation of SBP governor)

Anwar is a US citizen and is a graduate of the Wharton business school at the University of Pennsylvania. He was appointed deputy governor of SBP in 2007 and has 33 years of  international banking experience. Prior to his appointment at the SBP, Anwar was associated with Kraken Financial Group, London as its executive vice-president since 2003.

“Yaseen Anwar is professionally pretty good and as deputy governor has done some good job,” said former finance minister Shaukat Tarin.

While some appreciate his professional attributes, others, including those who have worked closely with him, are sceptic, fearing that the central bank would further lose its autonomy to the finance ministry.

“Anwar is a typical banker,” said Dr Ashfaque Hasan Khan, a renowned economist. “If appointed, he may not meaningfully contribute in economic policy making and the institution of the SBP would further weaken, and could easily be used for political purposes.”

Anwar’s colleagues add that he is reserved, and is not an avid contributor at meetings. They quote a recent meeting with the International Monetary Fund in Washington where he was unable to present the country’s case.

‘Weak’ governor

Many viewed SBP’s latest decision to cut the policy rate by 1.5% in one go as an evidence of leverage the federal government would enjoy over a “weak governor.” Earlier, under Anwar, the central bank had reduced the discount rate by 0.5%.

(Read: Explaining the rate cut – A case of contrasting styles)

“A 1.5% cut in policy rate was too big a decision”, said Dr Hafiz Pasha, the former finance minister who served on the Monetary Policy Committee of the SBP until May. The committee has, since then, ceased to exist, closing the only window available to macroeconomists to participate in monetary policy formulation.

After the parliament’s refusal to provide a legal base to the Monetary Committee, the bank’s Central Board of Directors has been revived, dominated by the government and comprising businessmen who are dwarfed by the federal finance secretary.

None of the Board’s private members at present are credible macroeconomists, a demand reiterated by independent experts.

(Read: A gamble with the economy)

Sources fear that Anwar could be used by the presidency to whitewash its financial profligacy. For the past several months, the federal government has successfully blocked a move to discuss the accounts of the National Bank of Pakistan. According to unconfirmed reports, the NBP extended billions of rupees worth of loans on substandard collaterals, on political grounds, and the central bank failed to play its regulatory role.

Published in The Express Tribune, October 19th, 2011.

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Reader Comments (17)

  • Mirza
    Oct 19, 2011 - 7:11AM

    PML-N and “independent” courts should get ready for taking action againt this appointment as well. Let us keep up the tradition of main na manon.

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  • Husein Ali Khan
    Oct 19, 2011 - 8:29AM

    He may get the job, but he will ruin the economy looking at his past 3 month performance. What a pity…………………

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  • Mohammad Ali Siddiqui
    Oct 19, 2011 - 9:01AM

    The same old story is repeated time and again.

    Yaseen Anwar is holding a dual national. At the time when he is a Pakistani, he is also a US national.

    What oath he is going to take at the time when he will become the Governor of State Bank of Pakistan?

    Will he be protecting the interest of US or Pakistan?

    If this is the case, why not the President of Pakistan, Prime Minister of Pakistan and Chief of the Army Staff should be a dual national, viz a viz Pakistani as well as of US.

    I take a strong exception in appointing Yaseen Anwar. Don’t we have any other person who should be educated in Pakistan and at the same time should only hold’s Pakistani nationality, so that he should protect the interest of Pakistan, and not of the US.

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  • Khalid Jami
    Oct 19, 2011 - 9:45AM

    @Mirza:
    So true, they will only agree if Chaudhry Nisar is made NAB Chairman and Ishaq Dar as Central Bank Governor

    Yaseen Anwar Sahab has done something which other governors havent done. Assist the government in the policy for growth. How can there be growth if interest rates are at 14% and add a margin to it, banks would be charging 16% in all, the bare minimum!!

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  • Fahad
    Oct 19, 2011 - 9:47AM

    Good decision !!

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  • Saad Ullah
    Oct 19, 2011 - 11:08AM

    Although im a strong opposer of PPP, but any newly appointed person in any field shud be atleast given a chance to prove himself , before critisizing! Lets see how this new governer performs!

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  • waseem shah
    Oct 19, 2011 - 1:07PM

    Impressed

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  • Husein Ali Khan
    Oct 19, 2011 - 1:43PM

    Oath of US Citizenship:
    http://alturl.com/62sg5
    Oath

    “I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state or sovereignty, of whom or which I have heretofore been a subject or citizen; that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I will bear arms on behalf of the United States when required by the law; that I will perform noncombatant service in the armed forces of the United States when required by the law; that I will perform work of national importance under civilian direction when required by the law; and that I take this obligation freely without any mental reservation or purpose of evasion; so help me God.”

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  • Haider Hussain
    Oct 19, 2011 - 3:09PM

    Political appointment…

    Once, I casually asked my uncle that what’s the one-line panacea of today’s economic & political woes. He answered that although this is too naive to think about such a one-line solution, but if a decision is made that politicians, armed forces servicemen and key bureaucrats cannot hold dual nationalities, it would be a good idea. Now, no matter how deep I think about it, I find it perhaps THE best solution available.

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  • Hasnain
    Oct 19, 2011 - 3:18PM

    @Jami
    Sir it is not the duty of central bank to support the growth, the private sector has been rather crowded out by government’s heavy borrowings from commercial banks. Commercial Banks are preferring to invest in risk free government paper than in risky private enterprenurship and government’s surging borrowing are taking the fundings away from the banks. With government’s heavy involvement in the commercial banking sector, i only see current decision as a polticial and driven by self interest. Since government is now out of IMF program, the only way to make up for the lost expected liquidity is to facilitate the further borrowing at lower rate, just wait for a few month to se inflation surging again. With soaring polticial uncertainity, deteriorating law and order, do you expect the investors to expand? It is altogather a wrong preception that private sector will grow only if low interest rate enviornament prevails. SBP has always been providing the business and export sector in perticular with subsidized funding (Export refinance and LTTF), the current decision to make the biggest ever downword move was drastic as all around the globe (ECB,BoE,BoJ,RBA,Fed) the policy is shifted gradually. If I put it Yasin made a preemptive move to cement his place as a governor.

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  • Hussain
    Oct 19, 2011 - 3:19PM

    He is most suitable person for this post.

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  • adnan
    Oct 19, 2011 - 4:46PM

    he is the best available person to hold this post

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  • Cynic
    Oct 19, 2011 - 5:17PM

    Most suitable? hardly.. a dual citizen should NOT be holding this office. And for those who feel that low interest rates foster growth, I couldn’t put it better than Hasnain.

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  • Irfan
    Oct 20, 2011 - 10:41AM

    I also like to register my reservation against appointment of Mr Yasin as Governor SBP. Firstly why are we allowing dual nationals to hold such a key post as they don’t have their mind & heart with Pakistan. Secondly decision of reducing discount rate by 1.5% in one go is going to mainly benefit government as they will further increase borrowing at lower rates and would result in further crowding-out rather than growth. Third as pointed out in the article ‘he is not avid contributor in meeting’ means he would not be taking any tough stance against government’s economic policy so we will see further ruining of economy.

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  • Karim
    Oct 20, 2011 - 3:10PM

    Let him work and see what he can do for Pakistan

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  • Falcon
    Oct 20, 2011 - 10:25PM

    @Saad Ullah and @Karim

    You are right that a person should be given a chance. However, the very fact that Mr. Yasin took a less than ideal decision from the beginning by slashing the discount rates right shows that the esteemed new governor will most likely take decisions that might seem ‘good’ in the short run but will be devastating in the long run. This is because as mentioned earlier it will increase the inflation even further and reduce the funds available for private sector borrowing (who are the primary drivers of growth in any economy). Besides, Pakistan is not like US economy where interest rates are suppressed to stimulate the economy that is facing deflationary pressures. US targeted inflation rate is 2% and our inflation rate is already south of 12%. Putting it simply, it will make things even more expensive and suppress economic growth. Having Wharton credentials is not good enough, you as an economist have to deeply know the macro-economic context you are operating in.

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  • Muhammad Arshad
    Oct 21, 2011 - 3:32PM

    I think possessing dual nationality is not harmful either for the country or the intitution.Let’s hope for goodness and larger interest of the nation.
    The appoitment of Mr.Yaseen Anwar is blessing for the institution as well as the country.He will take much time to concentrate on Core Central Banking issues rather than learning and understanding the norms and working of SBP for at least 1 year.The former Governor delivered nothing by kepping himself busy with petty issues,learning the State Bank and doing new experiments in the name of restructuring.

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