Mohammad Younus Dagha was removed as the secretary finance on Thursday, a notification issued by the Cabinet Secretariat/Establishment Division said.
A separate notification announced the transfer of Naveed Kamran Baloch, who was posted as cabinet division secretary, to the role of finance secretary.
Baloch has previously served as Khyber Pakhtunkhawa Chief Secretary. He joined the civil services on October 22, 1985. He was previously a grade 22 officer with the Pakistan Administrative Service (PAS), posted as Secretary National Health Services, Regulations & Coordination Division. He will retire on March 7, 2021.
Maroof Afzal, who is currently posted as secretary of the Information Technology and Telecommunication Division, will be posted to Baloch's previous position as cabinet division secretary.
Dagha took charge as finance secretary in March after the post fell vacant following the retirement of incumbent Arif Ahmed Khan.
Dagha's removal from the post comes a day after Board of Investment (BoI) chairman Haroon Sharif, who was appointed eight months ago, tendered his resignation to Prime Minister Imran Khan.
On Wednesday, reports had emerged that Dagha was also likely to be replaced within days.
A high-level source familiar with these developments had told Dawn that Dagha had developed differences with Adviser to the Prime Minister on Finance Dr Hafeez Shaikh over the negotiations with the International Monetary Fund (IMF).
"Dagha felt that the adviser had negotiated a bad deal for Pakistan," the source said. The differences emerged in the last round of meetings with the IMF.
"The team led by former finance minister Asad Umar, of which Dagha was an important part, had softened the IMF programme in significant ways," the source claimed. Shaikh wanted the programme to be "front loaded", meaning most of the difficult reforms to be done upfront rather than lagged out over a period of time. This is what created differences between them, reaching to a point where Dagha did not participate in the last few rounds with the IMF before the programme was finalised.