Fitch has said: A central bank governor doesn’t need to have a rock star status to be successful in reigning in inflation or cleaning up the banking sector.
Fitch, the global ratings agency, is of the view that from the perspective of deciding on any country’s rating, policies are more important than personalities. Fitch currently rates India at ‘BBB-‘, with a stable outlook. This is the lowest investment grade rating. Speaking with reference to any possible change to India’s credit rating after Raghuram Rajan’s term ends in September, Thomas Rookmaaker, Director, Asia-Pacific Sovereigns Group, Fitch Ratings has said, “A central bank governor doesn’t need to have a rock star status to be successful in reigning in inflation or cleaning up the banking sector.”
Commenting on the appointment of Urjit Patel as Rajan’s successor at the RBI, Rookmaaker said “Urjit Patel’s appointment as the next RBI governor signals a strong likelihood of policy continuity.” “The positive transformation set in motion by governor Rajan, starting with the recognition of the problems associated with both high inflation and weak bank balance sheets, is not yet complete,” he said. “Having served as deputy governor in the past three years, Urjit Patel is well-positioned to further institutionalize these policy changes in the period ahead,” Rookmaaker added.
Urjit Patel has been a deputy governor of the RBI since January 7, 2013. He is credited for being the one who authored RBI’s recommendation on the Monetary Policy Committee (MPC), a landmark reform in the country’s monetary policy decision making. At present Patel is incharge of monetary policy, statistics and information management, economic policy research and deposit insurance among other key things. Just like Rajan, Patel is also known to be an ‘inflation warrior’. The fact that PM Modi has chosen him to replace Rajan assumes significance in the backdrop of the 4% inflation target that has been agreed upon between the central bank and the government.