What Raghuram Rajan’s departure from the Reserve Bank of India says about the role of the central banker
“I am Raghuram Rajan and I do what I do.”
That was the head of the Reserve Bank of India six months ago. It may have been the greatest statement of independence ever uttered by a central banker. The Indian press had fun with it — too much fun, perhaps: Rajan was christened the “James Bond” of monetary policy. Like the fictional British spy, he had demonstrated a roguish side that pleased the masses as much as it irritated his political masters in New Delhi.
The country was an economic basket case when Rajan took over the RBI in 2013 — annual inflation was more than 10 per cent; it now is 5.7 per cent — and India has graduated from the “Fragile Five” to become the world’s fastest growing major economy. International investors would say, in private, that Rajan’s presence was the only reason they were willing to take a chance on India, a notoriously difficult place for outsiders to make money.
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