The departure of Dar, widely credited with navigating Pakistan out of a 2013 balance of payments crisis, comes as the country is seeking to raise in excess of $1bn on debt markets through a Sukuk and a Eurobond in coming months.
The country is battling to stave off balance of payments pressures due to dwindling foreign currency reserves and a widening current account deficit in the $300bn economy.
Among the names mentioned in local media as possible finance chiefs are Miftah Ismail, an economist who was until recently chairman of the country’s board of investment, and former finance minister Sartaj Aziz.
Others have speculated that Prime Minister Shahid Khaqan Abbasi might run the finance portfolio himself until the next general election, likely in August 2018.
On Wednesday Abbasi granted indefinite leave to Dar, who is receiving treatment in London for a heart condition.
Images showing him on a hospital bed in the UK were published in local media earlier this month.
A warrant has been issued for his arrest after he missed several court appearances on corruption charges that he had amassed wealth beyond his known sources of income.
Dar came under the radar of an inquiry sparked by the Panama Papers leak last year which centred on discrepancies between the income of former prime minister Nawaz Sharif and his lavish lifestyle, particularly his family properties in London.
Dar has denied all charges, as has Sharif, who also faces corruption cases after being ousted by a court in July in what his supporters call a political vendetta engineered by opposition leaders and elements of the powerful military.
In a 17-year-old case that the Supreme Court has reopened against Sharif, Dar admitted to money laundering for him.
He later claimed that he made the confession under duress by the military government of General Pervez Musharraf.
The case against Dar had, along with Pakistan’s worsening economic outlook, led to mounting calls for him to resign.
“Dar’s exit was expected for over a week now, and there were already indications other people in the government were looking at aspects related to finance,” said Saad Hashemy, chief economist for Topline Securities Pvt. “The prime minister and a few other people were taking care of economy-related matters.”
Analyst Hasan Askari said the prime minister can grant leave to a minister, who technically retains his post, status and privileges during the period of absence.
“It is in fact a face-saving formula that they have devised, otherwise he deserved to be knocked out anyhow,” he told AFP, referring to the corruption allegations.
Whoever runs the finance ministry, few expect it to stray from Dar’s commitment to a stable rupee, which has been endorsed by Abbasi.
The ruling Pakistan Muslim League-Nawaz (PML-N) party has been reluctant to allow the rupee to weaken ahead of looming elections as it may stoke inflation, though many investors and economists say the move is needed to shore up lagging exports.
Fawad Khan, head of research at BMA Capital, said that Dar’s departure might give some investors pause ahead of the Eurobond and Sukuk offerings.
“It is possible that some people might not participate in the process or demand a high yield,” Khan said.
