‘Rajan’s fans are devastated’: How foreign media reacted to ‘Rexit’

  • HT Correspondent, Hindustan Times, New Delhi
  • Updated: Jun 20, 2016 11:11 IST
Reserve Bank of India (RBI) governor Raghuram Rajan gestures as he answers a question from the audience after delivering an address at a New Delhi event. (Reuters)

Reserve Bank of India governor Raghuram Rajan’s decision to not seek a second term continues to stoke debate and generate interest across the world.

The Washington Post wrote on Sunday Rajan’s surprise decision to return to academia at the end on his term in early September had left his fans devastated.

A write-up headlined ‘India’s ‘rock star’ central banker quits, and his fans are devastated’ on the newspaper website said the immensely popular governor of the RBI was widely seen as an economic reformer who ably guided the country’s economy since 2013. His image helped India shore up investor confidence abroad.

The 53-year-old, it said, had many fawning admirers in India but his relationship with the Modi government was choppy. While quoting headlines of several Indian dailies, including the Hindustan Times, the report also carried tweets reacting to Rajan’s bombshell announcement, including the one from Rahul Gandhi: “Prime Minister Narendra Modi knows everything. He has no need for experts like Raghuram Rajan.”

The UK-based Financial Times said Rajan’s announcement could send tremors through India’s financial markets. Even if immediate reactions were muted, the long-term effects would be more telling, wrote Eswar Prasad, a professor with Dyson School at Cornell University and a senior fellow at the Brookings Institution.

Prasad said Rajan’s major virtue, and an unforgivable fault in the eyes of government acolytes, was he didn’t sign up to the triumphalist view of India as the fastest-growing major economy. Rajan pointed out its growth was built on shaky foundations and deep-rooted reforms were needed to shore up the economy.

Choice of replacement for Rajan would indicate the direction Modi would steer the Indian economy in, the Wall Street Journal India said on Monday. The departure of Rajan had revived investors’ questions about the direction of Prime Minister Narendra Modi’s economic agenda and his political will to pursue it, it said.

Talking about “Rexit”, Al Jazeera said the “rock star banker” was credited with bringing stability to India’s economy but faced mounting criticism within the ruling BJP over interest rates and a perception that he had begun to stray into politics.

The report on the Doha-based satellite channel’s website also said an online petition for Rajan to stay on had gathered tens of thousands of signatures.

Reporting Rajan’s decision, the New York Times said his tenure enhanced India’s standing in international markets but frustrated conservatives and small business owners eager for deep interest rate cuts.

Rajan had expressed interest in a second term but, in a letter to colleagues, he said, he reconsidered. The letter, the June 18 report said, implied his decision was driven by the preference of the Modi government.

The report also talked about Rajan predicting the 2008 financial crisis three years in advance to “an incredulous audience of prominent bankers and economists”.

Read| RBI chief Raghuram Rajan felt undermined in weeks before quitting: Report

Read| Rajan’s exit will not affect clean-up move of banks saddled with bad loans

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