RBI Governor Raghuram Rajan has indicated he will not seek a second term. Rajan, a former chief economist at the International Monetary Fund, is held in high esteem by policymakers and investors at home and abroad for overhauling the way the RBI operates and for managing the economy efficiently.
Reacting to the news, market analyst Ajay Bagga believes that markets don’t like surprises, and hence Rajan’s departure may well impact the Foreign Exchange, Bond and Equity markets.
“Raghuram Rajan has done a good job as RBI Governor. The surprise element will impact the FX , Bond and Equity markets sentiment for a short time. Coupled with the Brexit related volatility the impact can be a little more. The onus will be on the Central government to announce a successor fast and to accelerate the reforms process. More than that there is a lot of depth in RBI to manage the transition and to take monetary policy ahead” said Bagga.
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Rajan’s term as RBi governor ends in September 2016.