New Governor, Old Governors, No Governor

Four nations are replacing their central bank governors.

Amid economic and monetary challenges, central bank leadership is being set in four Commonwealth countries, including the UK. Pakistan has named a new governor for the State Bank of Pakistan, Nigeria and Zimbabwe have confirmed their present governors for second terms, and the Bank of England is seeking a replacement.

Nigeria’s president offered a second five-year term to Central Bank of Nigeria Governor Godwin Emefiele. Emefiele stabilized Nigeria’s currency, the naira, setting multiple exchange rates for different sectors, with a discounted rate for investors and exporters. Emefiele also implemented low-interest lending programs to fund agriculture and manufacturing. Recently, the bank announced a new, $500 million fund for the creative industry. Reappointment of Emefiele means policy continuity, but not the market reform investors would like to see, says Pabina Yinkere, CIO of Sigma Pensions in Lagos.

John Mangudya, governor of the Reserve Bank of Zimbabwe was also reappointed. When he began his first term in 2014, Mangudya faced the challenge of fixing the country’s severe dollar shortage, which was crippling critically necessary imports.

Pakistan tapped Reza Baqir to replace Tariq Bajwa, who was appointed in 2017. Pakistan is currently in talks with the IMF as part of efforts to rebuild its economy. Baqir, who worked as the IMF’s senior representative in Egypt, is already part of Pakistan’s negotiating team, which recently reached a staff-level agreement on a new three-year, $6 billion bailout package. A key issue in the ongoing discussions is the country’s currency, the rupee, which the IMF insists be floated rather than managed. “A managed FX rate provides short-term stability, but long term, it will curb foreign direct investment inflow because of expectations of a large devaluation,” Yinkere says.

That leaves the UK, which may not name a successor to Mark Joseph Carney until October. Several names have been floated. The most notable is Raghuram Rajan, a former governor of the Reserve Bank of India and currently a professor at the University of Chicago.