It would be an understatement to say that the governor of the State Bank of Pakistan (SBP), the country's central bank, has his hands full. Trade and budget deficits are ballooning, foreign currency reserves are shrinking, and a return to the hands of the International Monetary Fund (IMF) seems imminent. Yet Tariq Bajwa, in his post since July 2017, presents a calm exterior.
In May, the independent Monetary Policy Committee, chaired by Mr Bajwa, raised Pakistan's main policy rate by 50 basis points (bps) to 6.5%. This followed a 25bps hike in January, up from a 44-year low of 5.75%. The latest double-jump partly reflected the build-up of inflationary pressures, including increased petrol prices, which are set every month by the government. Core (non-food, non-energy) inflation rose from 5.7% in January to 7.2% at the end of May.
