India has its … “Rexit” or “Raghuram exit”. Since Saturday, the country is looking for a new central bank governor after the surprise decision to Raghuram Rajan, the job for only three years, not to seek re-election. In a letter addressed to the staff of the Reserve Bank Of India (RBI), Raghuram Rajan said that the Indian central bank had achieved good results in the fight against inflation – its primary objective – it had managed to stabilize and the rupee had addressed the problem of bad debts of banks.
“ Although being open to continue to follow these developments, after careful consideration and consultation with the government, I wanted to announce that I will return to my academic career at the end of my term as governor Sept. 4, 2016 “writes Rajan in his mail.
differences with the government
the governor of the central bank (also a former chief economist of the International monetary Fund) suggested that differences with the Hindu nationalist government of Prime Minister Narendra Modi had played in his decision not to seek a second term. The Governor of the RBI has recently been under attack by several MPs from Bharatiya Janata Party (BJP), the party in power, particularly from Subramanian Swamy, Hindu nationalist MP and former Harvard economist.
Rajan had taken control of the RBI in September 2013. India then had to face a strong payments deficit, slowing growth and double-digit inflation. Indian media then affublent the nicknames of “rock star ” or “ James Bond ” finance for ending the worst currency crisis that country has known for over 20 years.
since September 2013, inflation slowed to 5.8% (against 10%), the rates have been reduced to their lowest level since early 2011 to strengthen the acceleration of growth which reached 7.9% in the first quarter.
Figure deemed crucial
in a note published Monday, consultancy and research British economic Capital Economics, believes “ Rajan governor is widely considered one makers (economic) more credible, not only in India but also in emerging countries.”
Shubhada Rao, chief economist at Yes Bank regret his departure. “This is a very disappointing announcement. In a short time, it has implemented major reforms (..) The RBI played a crucial role in the return of credibility” ‘s Indian economy, he told AFP.
Luke Spajic, head of emerging Asia to manage PIMCO fund, the government should not drag their feet under penalty to discourage foreign investment, which totaled more than $ 60 billion since the appointment of Rajan in September 2013.
in opening trade, the announcement of his departure has driven the rupee 0.8% at about 67.69 rupees to the dollar, according to the Press Trust of India. The benchmark index of the Bombay Stock Exchange, the Sensex, gained meanwhile 0.25% to 26,693 points 4:55 GMT.
Who will succeed the “James Bond” of finance?
According to information obtained by Reuters, a first list of seven possible candidates have been established. Y include in particular Urjit Patel, deputy governor of RBI, and Arundhati Bhattacharya, chairman of the State Bank of India, first bank in the country
The five others, less known. – Vijay Kelkar, Rakesh Mohan, Ashok Lahiri, Subir Gokarn and Ashok Chawla – are senior officials who made a career at the central bank or in international institutions like the IMF or the World Bank
(with AFP and Reuters)
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