Opinion divided on ex-SBP head's performance.

KARACHI -- Dr Reza Baqir, the former governor of State Bank of Pakistan (SBP), was appreciated and criticised as his term came to an end. However, the perception that the SBP become a supporter of the rich and big businesses under his command has grown stronger.

Dr Baqir completed his three-year term and has been replaced by the Deputy Governor Dr Murtaza Syed who will be heading the central bank as an acting governor effective May 5, anncounced a circular issued on Thursday.

On May 3, Finance Minister Miftah Ismail in a tweet announced that as the term of Governor SBP Dr Baqir has come to an end, as per the law senior most deputy governor takes over.

Therefore, Mr Murtaza Syed, an eminently qualified economist with rich International Monetary Fund (IMF) experience, will take over as acting governor SBP.

The much-trumpted and appreciated Temporary Economic Finance Facility (TERF) also came under severe criticism by economists and analysts.

'The SBP under Dr Baqir's governorship provided about Rs500 billion at one per cent to support trade and industry to save them from the shocks of Covid-19 pandemic and now the government is borrowing at 15pc,' said a senior banker, not willing to be identified. Those who received large sums of money at 1pc interest automatically became wealthy and earned billions simply by the difference in interest rates, he added.

Not only that, but it was more important to note who was given such a large sum of money, mostly to the wealthy and for ten years, making them even wealthier, critics opined.

Opinions are divided since many analysts believe the cheap financing will pay in the future and exports will go higher.

Dr Reza Baqir

He also acknowledged that he was making late decisions about interest rates. The interest rate was increased by 250 basis points last month when the Treasury Bills (T-bills) rate was much higher than the interest rate. The same situation has now developed. The T-bill rate is 14.99pc and the interest rate is 12.25pc, but the decision is yet to be taken.

Researchers and bankers were also critical about Dr Baqir being too pro-government as he never criticised the government or the Finance Ministry while seeing the government was on the wrong track.

'The new governor is required to criticise and advise the government and the ministry of finance in their reports,' said Mohammad Sohail, the CEO of Topline Securities.

However, Dr Baqir's initiative for free flotation of the exchange rate could not...