Abdul Hafeez Shaikh on Tuesday resigned as Pakistan's Finance Minister amid mounting speculation that he would play a key role in the caretaker administration that is expected to oversee the next general election scheduled for mid-May.
Shaikh was replaced by Minister of State for Finance Saleem H Mandviwala within hours of his resignation. President Asif Ali Zardari administered the oath of office to Mandviwala during a ceremony held at the presidency.
The ceremony was attended by Prime Minister Raja Pervez Ashraf, federal ministers, National Assembly Deputy Speaker Faisal Karim Kundi, parliamentarians and senior officials.
"Yes, I have resigned from the ministerial slot," Shaikh was quoted as saying on the website of The News daily. His resignation came just days after the Pakistan rupees slid to a historic low of Rs 100 to the US dollar.
However, there has been speculation since last week that Shaikh would play a key role in the caretaker government that is expected to be set up soon to oversee the next general election.
Several federal ministers have said the National Assembly will be dissolved after it completes its five-year term on March 16 and the polls will be held by mid-May.
But Shaikh, who has taught at Harvard and Cambridge universities and worked for the World Bank, is not acceptable to the main opposition Pakistan Muslim League-Nawaz party.
He is perceived by some as being too close to the military as he had served as privatisation minister under former military ruler Pervez Musharraf.
Shaikh has been criticised for failing to tackle weak economic growth, a huge budget deficit and dwindling foreign exchange reserves. He was also unable to push through reforms demanded by the International Monetary Fund, including the widening of the tax base.
Pakistan was offered a bailout package of $11 billion by the IMF in 2008 and experts believe the country will have to seek further assistance in the near future.