Raza nominated to replace Akhtar

Akhtar, who served as governor for three years, said she would be stepping down on 1 January.

If he accepts the prime minister's offer to replace Akhtar, Raza will step into the governor's position at a particularly challenging time. Pakistan recently signed a loan agreement worth $7.6 billion with the International Monetary Fund to stave off an impending crisis on its foreign payments.

The Fund said last month that economic growth may fall to as little as 3% this fiscal year, from an average of 7.5% from 2003 through 2006. The new head of the State Bank of Pakistan will have to subdue inflation, running at more than 24%.

Raza joined the Pakistan Business Council, an industry lobby group, in 2006 after a long and international career at Citigroup, a bank. The Oxford University graduate worked for more than three decades at Citi in London, Abu Dhabi and Karachi.

Pakistan's central bank last raised interest rates on 12 November, hiking rates by 2 percentage-points to 15%. Akhtar described the hike as "the toughest decision of my life."

The central bank may have to raise interest rates further if its foreign-exchange reserves fall below a monthly floor agreed with the Fund. The country's reserves have fallen some 75% this year to its current level of $3.45 billion.

Before working at the central bank, Akhtar was director general of the Southeast Asia department at the Asian Development Bank. She joined the multilateral lender in 1990 and previously had been a World Bank economist in Islamabad.