News / Economy

India Appoints Renowned Economist to Head Central Bank

Reserve Bank of India’s (RBI) newly appointed governor Raghuram Rajan takes charge at the RBI headquarters in Mumbai, India, Sept. 4, 2013.
Reserve Bank of India’s (RBI) newly appointed governor Raghuram Rajan takes charge at the RBI headquarters in Mumbai, India, Sept. 4, 2013.
TEXT SIZE - +
Anjana Pasricha
— At a time when India’s currency is plunging and its economy is in a downward spiral, a renowned economist has taken charge of the nation's central bank. The new governor faces an uphill task in restoring faith in both the country’s currency and its economy.
       
The new head of India’s central bank, Raghuram Rajan, is a former chief economist at the International Monetary Fund who is well known for having predicted the 2008 global financial crisis two years before it sent shock waves around the world.
 
As he takes over his new assignment, India is also in the midst of a financial storm. The nation's currency, the rupee, has lost nearly twenty percent of its value this year against the dollar. Several banks have slashed growth forecasts for this financial year to four percent. That is down to half the growth rate in 2008 and even lower than the decade-low five percent rate posted last year.
 
Expectations about the new governor are high as India looks for a way out of its economic downward spiral. The academic was chief economic adviser in the Finance Ministry before coming to the central bank.

A. Prassana, chief economist at ICICI Securities in Mumbai, said Rajan’s priority will be to stabilize the currency.

“It is difficult, because the problems are of a fundamental nature. But he is pretty much clued on to things like financial stability, which clearly have become a big factor," said Prassana. "Here there is a person who was thinking about these things much before they became fashionable.”

Experts said restoring faith in India’s currency will not be easy. The plunging rupee is a sign of an economy in trouble on several counts: the country is running a high current account deficit which means its exports, measured in dollar earnings, add up to less than its imports.

Manufacturing has slowed. High inflation has curtailed consumption. And as growth plummets, investors are losing confidence. As in other emerging markets, they are pulling out funds and putting them in the United States, where the economy is reviving.

Analysts said a turnaround will depend on the government’s willingness to press ahead with key reforms to attract investors - a step Rajan strongly supports.

The new central bank chief has cautioned that there are no “quick fixes.” When his appointment was announced last month, he acknowledged the challenges the nation faces. “We do not have a magic wand to make the problems disappear instantaneously, but I have absolutely no doubt we will deal with them,” he said.

That is what many in India are hoping as concerns grow about the ailing economy.

You May Like

Algerians Vote in Presidential Election

There were few media reports of protests and clashes around the country, but so far no significant violence More

Sharks More Evolved than Previously Thought

The discovery could “profoundly affect our understanding of evolutionary history” More

Pakistan Military Asked to Protect Polio Workers

Request comes as authorities say a Taliban ban on vaccinations in 2012 and deadly attacks on anti-polio teams have prevented thousands of children from getting inoculated More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.