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ISLAMABAD: With top government functionaries trying to persuade the State Bank governor to withdraw his resignation, Shahid Kardar is seeking assurances that he will have complete autonomy to run the bank, sources close to backdoor talks told Dawn on Sunday.
Federal Minister for Finance Hafeez Shaikh, the key player in the talks, is asking Mr Kardar to review his decision, telling him that change at the State Bank at this point in time would deal a severe blow to the country’s already poor economy.
The sources said that Mr Kardar was willing to take back his resignation, provided he was given complete independence to lead the bank.
Talking to Dawn, a senior government official, who preferred not to be identified, said: “Yes, a serious effort is on to retain Mr Kardar at the helm of state bank’s affairs. However, the gentleman is asking for an interference-free working environment both in policy making and administrative affairs of the bank.”
When asked how he would explain the state of talks between the government and Mr Kardar, the official said they were looking positive but yet to reach a stage where one could say the issue stood resolved.
The media wings of both the Prime Minister Secretariat and Presidency are keeping silent, apparently in hope that the talks to retain Mr Kardar – a close relative of federal Minister for Defence Chaudhry Ahmad Mukhtar – would be successful.
Presidential spokesman Farhatullah Babar said: “So far no formal summary (about Mr Kardar) has been received in the presidency.”
Sources in the central bank said that of late Mr Kardar had faced severe criticism from both within the bank and outside by independent minded economists for giving in too easily to the government over various policy issues.
A few months ago, Mr Kardar had agreed to accept the secretary finance on the bank’s advisory committee, thus creating a room for the government to intervene in the bank’s administrative affairs.
Then fingers were pointed at him for creating high inflation in the country by printing currency notes on the whims of the government. Therefore, the sources said, Mr Kardar had decided to quit.
Mr Hafeez Shaikh had played a key role in the appointment of Mr Kardar as the State Bank governor. Therefore, the government is banking on him to pursue Mr Kardar and get his mind changed.
According to one government official, given the country’s precarious financial position and at a time when it is engaged in tough negotiations with International Monitory Fund – which is asking for stringent monetary policies – it will be a tough call for Mr Kardar to keep his position as the governor intact.
Explaining, the official said that the government wanted some pliable person to head the bank as general elections were only one-and-a-half years away and it would need money to prepare the ground for polls, and printing of banknotes was an easy way to do so.
