Dr Raghuram Rajan takes Charge as RBI Governor – Thugs & Politicians Don’t Mess
September 5, 2013
Dr Raghuram Rajan, world famous Economist has come to the rescue of the Indian Government as he assumed charges as the RBI Governor. The message from the Governor is straight – Progressive Reforms for India.
Highlighting the critical need for transparency and predictability in conveying and guiding monetary policy, governor Rajan appeared to draw a distinction with the frenetically paced and sometimes contradictory and counter-productive measures taken by the central bank in recent months.
Some of the broad measures announced are as follows,
- He announced the introduction of inflation indexed saving certificates, linked to the CPI index for retail investors by November 2013.
- He has shifted the monetary policy meeting from September 18th to September 20th, primarily to watch for major global development such as the Fed FOMC meeting scheduled for September 18th.
- Rupee internationalization and Capital Inflows: From a long term perspective, he underscored the importance of rupee internationalization, as our trade expands.
- Financial Inclusion: The governor emphasized the role of banking sector in a developing country like India and importance of proving access to finance for the less developed segments of the society.
- Given the sharp volatility in the Indian Rupee, the Governor announced a series of much needed measures to improve depth and volume in the financial markets.
The scope and coverage of the measures announced, which address both short term as well as long term issues, signals a strong intent on the RBI’s part to revamp the current situation.
As a teaser of what is to come, he announced greater provision for currency hedging, incentive for prudent external borrowing and foreign currency deposit mobilization, investment instruments with inflation protection, and long-dated interest futures.
Our View Going by Dr. Rajan’s track record, he’ll buy time with the desperate foreign investors planning to EXIT India and they are HIGHLY LIKELY to listen to him. He has the backing of FM, P.Chidambaram. FM along with the Governor will start plugging the Current Account Deficit prevalent due to Gold imports as Gold investment to large extent is by unaccounted money in India[ Will not happen overnight, but will definitely be plugged and streamlined to an extent]. However, if Thugs within the Government and Politicians obstruct any moves, Dr. Rajan may not hesitate to quit his position & India will be at the mercy of Foreigners who may devalue the currency and make our lives miserable. So Thugs and IL-literate Criminal Politicians stay away from the RBI Governor.