THURSDAY JULY 14: Commitment to fiscal reforms: Kardar's exit may further shake confidence

ISLAMABAD: State Bank of Pakistan governor Shahid Kardar has resigned, a finance ministry official said on Wednesday, making him the second governor to leave in just over a year and sending a negative signal on economic outlook. It was unclear exactly when Shahid Kardar, the governor of the State Bank of Pakistan, resigned, but his departure is likely to further shake confidence in Pakistan's commitment to fiscal reforms urged by the IMF and other international lenders.
Kardar is the third senior policy maker to quit in Pakistan in less than a year and a half, following previous central bank governor Salim Raza's resignation in June 2010 and former finance minister Shaukat Tarin's resignation in February last year. "I can confirm that he has submitted his resignation," a Finance Ministry official said on condition of anonymity.
Central bank governors normally serve three-year terms. There was no reason given for his resignation. It was not clear whether Kardar's resignation had been accepted by President Asif Ali Zardari. IMF and Pakistan officials, including the State Bank of Pakistan governor, are due to meet later this month, although no date has been announced. It is unknown how Kardar's departure will affect the talks but a former economic adviser said it would hit financial markets.
"The IMF deals with institutions and not individuals so it's likely the acting governor will attend the IMF meetings," said Sakib Sherani, a former economic adviser to the finance ministry. "What's critical for the markets is who his successor is and why he resigned."
The central bank chief spokesman said he was unable to confirm the resignation. The IMF was unavailable for comment. Kardar joined as the central bank governor in September 2010, after the previous governor Salim Raza stepped down for "personal reasons" in June 2010. A senior government official at the time, however, said the government had been trying to curtail the central bank's independence, prompting Raza's departure.