“What is important is to not personalize this office. It will survive any Governor, it is bigger than any Governor,” the Economist magazine quoted Rajan as saying in its latest edition.
It was a sad day for “Rockstar” Raghuram Rajan’s fans as he announced that he won’t be taking up a second term as RBI governor.
He made this decision official on Sunday when we wrote a goodbye letter to his staff.
“I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016,” he said while adding that, “I am an academic and I have always made it clear that my ultimate home is in the realm of ideas.”
The RBI governor in his letter, which he made public, gave a reminder of how “fragile” the state of the Indian economy was when he took over. “At that time, the currency was plunging daily, inflation was high, and growth was weak. India was then deemed one of the “Fragile Five”, he said.
In his message, he also gave a detailed account of the impact the RBI had on the Indian economy under his leadership:
- “A new inflation-focused framework is in place that has helped halve inflation and allowed savers to earn positive real interest rates on deposits after a long time.”
- “We have also been able to cut interest rates by 150 basis points due to which the government has been able to issue a 40 year bond for the first time.”
- “Finally, the currency stabilized after our actions, and our foreign exchange reserves are at a record high, even after we have fully provided for the outflow of foreign currency deposits we secured in 2013.”
- “Today, we are the fastest growing large economy in the world, having long exited the ranks of the Fragile Five.”