IMF Pushes for Greater Autonomy of Pakistan's Central Bank
The IMF has proposed changes to increase the autonomy of Pakistan's central bank, including removing the finance secretary from the board and altering laws to reduce government oversight. These recommendations are part of efforts to ensure the independence of the State Bank of Pakistan as per the terms of the ongoing IMF loan package.
- Country:
- Pakistan
The International Monetary Fund (IMF) has called for significant changes to ensure the independence of Pakistan's central bank, the State Bank of Pakistan (SBP). One of the major recommendations involves the removal of the finance secretary from the SBP's board, aiming to minimize governmental interference.
Additionally, the IMF has urged the amendment of legal frameworks that currently allow the federal government to order inspections of commercial banks. The lender insists these steps are crucial for maintaining SBP's autonomy as part of the governance reform tied to the $7 billion loan assistance provided to Pakistan.
This isn't the first time such recommendations have surfaced. A similar attempt to curtail the federal secretary's influence within the SBP board was made three years ago. Discussions between the Pakistan government and the IMF are ongoing, with further evaluations expected in an upcoming review mission.
(With inputs from agencies.)
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