Reserve Bank of India governor Raghuram Rajan on Tuesday deflected queries on his extension saying that the issue will be decided by the government at the appropriate time.
“As far as my position on the issue of my extension is concerned, it would be cruel of me to spoil the fun that the press is having,” Rajan told reporters. “I am personally intrigued at all the letters that I am supposed to have written. This is an issue that the government will have to take and I can guide you to the statements that the finance minister and the Prime Minister have already made.”
There were unconfirmed press reports that the RBI governor had written to the finance minister requesting that all speculation about his re-appointment be curbed. Since last week, currency and bond markets have also reacted to the buzz on the issue of his second tenure. Although, the US Federal Reserve’s move to raise interest rates has been attributed as the real cause for the strengthening of the dollar.
Rajan’s term ends in September. With BJP MP Subramanyam Swamy openly criticising the RBI’s governor’s comments on the government, it was believed that the government was not too happy with Rajan. However, both finance minister Arun Jaitley and Prime Minister Narendra Modi have come out with statements defending the RBI as an institution and have said that appointments of the governor should not be debated in the media.
So far, the government has been non-committal about Rajan’s re-appointment. Prime Minister Narendra Modi has himself said that it was an administrative subject and it should not be an issue of interest of the media. “I don’t think this administrative subject (Rajan’s re-appointment) should be an issue of interest to the media. Besides, it will come up only in September.” Modi had told The Wall Street Journal in an interview last month.
Rajan, on his part, had earlier said during a conference in London last month that he has “enjoyed every moment of the job, but there is more to do.”
A former International Monetary Fund chief economist, Rajan has boosted India’s foreign exchange reserves to all-time highs and helped cut rupee’s swings by more than half since taking office in September 2013. He has also strongly advocated fiscal discipline, besides setting an inflation target.