Raghuram Rajan says Indian economy is 'fundamentally sound', unveils bold blueprint

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Raghuram Rajan took over as the new Governor of the Reserve Bank of India on Wednesday. (Express photo: Prashant Nadkar) Raghuram Rajan took over as the new Governor of the Reserve Bank of India on Wednesday. (Express photo: Prashant Nadkar)
SummaryRajan also said the primary role of the central bank is to ensure monetary stability.

Asserting that the economy is fundamentally sound, Raghuram Rajan Wednesday unveiled a bold blueprint for the financial sector, hours after taking over as the new governor of Reserve Bank of India.

Express Editorial: Raghuram Rajan must first stabilise the economy

“My sense is that we certainly don’t need false optimism. But I think there is good reason to believe the future of the country is strong,” he said in his first media interaction.

Raghuram Rajan takes over as 23rd Governor of RBI

Rajan’s decisions included immediately rolling back some of the capital controls introduced a month ago - that had sent the rupee spiraling downwards - by exempting spending abroad for education and medical treatment from the annual limit of $75,000 per person.

Express Opinion: New RBI governor must change policy

He has also permitted companies to borrow overseas for general corporate expenses, a window that will reduce their cost of credit and offered to create more space for trading in rupees to establish it as the currency of choice for international trade from India.

“I won’t read too much into their statement,” Rajan said on the renewed risk of a possible downgrade in India’s credit rating by Standard & Poors.

The 50-year-old University of Chicago economist also said he was not here to win popularity as the new governor. “The governorship of the central bank is not meant to win votes or Facebook likes,” he said, even as he made it clear he expected the RBI to change to take on the fast-growing expectations of India’s large population of young people.

“Change is risky. But as India develops not changing is even riskier,” Rajan said.

“I won’t read too much into their statement,” Rajan said on the renewed risk of a possible downgrade in India’s credit rating by Standard & Poors.

The 50-year-old University of Chicago economist also said he was not here to win popularity as the new governor. “The governorship of the central bank is not meant to win votes or Facebook likes,” he said, even as he made it clear he expected the RBI to change to take on the fast-growing expectations of India’s large population of young people.

“Change is risky. But as India develops not changing is even riskier,” Rajan said.

New RBI Governor Raghuram Rajan: Quotes

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