On September 4, 2016 Raghuram Rajan, Governor of India’s Reserve Bank (RBI), will step down from his post and be replaced by Urjit Patel. While Mr. Rajan’s term has been marred by partisan disputes and political differences, his contributions in stabilizing India’s economy cannot and should not be understated or forgotten. Mr. Rajan was appointed by the Congress Party led majority in 2013 and quickly set about taming rampant inflation and slowing the rupee’s decline. In spite of the opposition Bharatiya Janata Party (BJP) coming to power in 2014, Mr. Rajan was still able to accomplish most of what he set out to do during his tenure.
Working in tandem with the new Indian Prime Minister Narendra Modi, Messrs. Rajan and Modi were able to stabilize the fall of the rupee and make India an attractive place for outside investors. International investors saw Mr. Rajan as a beacon of safety in what used to be a turbulent Indian market. Buoyed by Mr. Rajan’s stable hand, India’s markets attracted foreign investments and India as a whole has remained extremely stable and promising especially when compared against its BRICS counterparts. However, once Mr. Rajan announced his retirement, international investors feared that the new Reserve Bank would erase all of Mr. Rajan’s advances. The international investing community breathed a collective sigh of relief once it was made official that Mr. Patel would be tapped to replace Mr. Rajan.
A lauded academic and a longtime assistant under Mr. Rajan, Mr. Patel represents a lot of the same values which his predecessor, Mr. Rajan, stood for and helped bring to India. Most analysts and economists agree that despite there being a different name heading the RBI, many of the policies which have made India such a promising economy will remain intact under Mr. Patel’s tenure. Investors can rest assured that despite there being a change up in the personnel in New Delhi, the RBI’s message and aim will remain consistent and unchanged.
