ISLAMABAD – The federal government on Thursday appointed Tariq Bajwa as the new governor of the State Bank of Pakistan (SBP), bringing in an Islamabad’s insider in the central bank at a time when the country faces severe challenges on the external economic front, private news channels reported here on Thursday late night.

Bajwa, who retired from the civil service last month as finance secretary, will be the third bureaucrat to be appointed as head of the central bank. He has been given the responsibility of ensuring financial soundness of the banking sector as well as supporting the government’s economic reforms agenda.

The staff of the finance secretary remained in the office even after midnight to notify the appointment of the new governor.

President Mamnoon Hussain has approved the appointment, said an official of the finance ministry.

The SBP Act of 1956 empowers the President of Pakistan to appoint a governor for a term of three years. The seat had fallen vacant in April this year when Ashraf Mehmood Wathra completed his three-year term but could not secure a second term despite his best efforts.

Bajwa did his Master in Public Administration from Harvard with a focus on economic subjects. He is the only Pakistani who has won prestigious Littauer fellowship.