PTI govt reluctant to link SBP governor's tenure with performance.

ISLAMABAD -- The Pakistan Tehreek-e-Insaaf-led government seems reluctant to link the tenure of State Bank of Pakistan (SBP) Governor Reza Baqir with performance and placing proper accountability in upcoming proposed amendments to the SBP Act, reported media.

The central bank is all set to share draft amendments to the SBP Act with Finance Ministry by end January 2020. A technical mission of the International Monetary Fund (IMF) is scheduled to visit Pakistan next week to finalise the draft of SBP amendments for granting autonomy to SBP.

'We are going to abide by timelines given for proposing amendments to SBP Act,' an official source said. The source added it would be quite important how much independence the government proposed for operational autonomy of the central bank.

Top official sources disclosed to The News on Saturday that there was a clear-cut difference between the commitments made by Pakistani side related to granting autonomy to the SBP Act with the IMF.

On eve of the IMF programme, the Pakistani side had committed that the lengthening of tenure of SBP governor will be linked with performance and accountability. However, after the first review under the IMF programme, Pakistani authorities excluded certain commitments from the signed set documents to the IMF through Memorandum on Economic and Financial Policies (MEFP).

The first IMF document released after approval of the six-billion-dollar Extended Fund Facility (EFF), stated that the Pakistani side will submit to Parliament amendments to the SBP Act by end-December 2019 (structural benchmark) addressing the recommendations of the new 2019 Safeguards Assessment Report including by

(i) ensuring its full operational independence in pursuit of price stability as its primary objective;

(ii) lengthening the governor's tenure and delinking it from the electoral cycle

(iii) improving SBP's governance, including by clear delineation between management and oversight functions, establishment of the Executive Board, protecting personal autonomy of SBP Board and MPC members

(iv) enhancing SBP's financial autonomy and accountability by strengthening the profit distribution rules and specifying adequate recapitalisation requirement...