Is RBI governor Raghuram Rajan behind the curve? | business | Hindustan Times
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Is RBI governor Raghuram Rajan behind the curve?

Some overseas investors and many in India’s corporate sector believe that Reserve Bank of India (RBI) governor Raghuram Rajan has been doing a fantastic job, but they have one complaint: Rajan, who completed his second year in office last week, like his predecessor D. Subbarao, has been behind the curve.

business Updated: Sep 09, 2015 12:02 IST
RBI-governor-Raghuram-Rajan-has-reportedly-written-to-the-PMO-detailing-scams-pegged-at-Rs-17-500-crore-Arijit-Sen-HT-photo
RBI-governor-Raghuram-Rajan-has-reportedly-written-to-the-PMO-detailing-scams-pegged-at-Rs-17-500-crore-Arijit-Sen-HT-photo

Some overseas investors and many in India’s corporate sector believe that Reserve Bank of India (RBI) governor Raghuram Rajan has been doing a fantastic job, but they have one complaint: Rajan, who completed his second year in office last week, like his predecessor D. Subbarao, has been behind the curve. While Subbarao was slow in raising interest rates, allowing inflation to surge, Rajan has been slow in cutting rates.

Before he stepped down as RBI governor, Subbarao had admitted that the economy would have been better served if the monetary tightening had started sooner and had been faster and stronger. However, I am sure that Rajan would not say in future that monetary loosening should have been faster to serve the economy better. Indeed, he is slow in paring rates, but this has been a deliberate act as he wants to kill inflation once and for all. In doing so, he has made RBI one of the most credible central banks in the world.

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