Successfully tackling the currency crisis has earned Reserve Bank of India Governor Raghuram Rajan the Euromoney magazine’s Central Bank Governor of the Year Award for 2014.
“Reserve Bank of India Governor Raghuram Rajan’s tough monetary medicine combatted the storm ravaging the deficit-ridden economy in the recent emerging market crisis. Now, he is battling vested interests to arouse a sleepy financial system for over one billion people,” Euromoney said while announcing the award.
Rajan took charge of the country’s central bank in early September last year, just a few days after the rupee plunged to its historic low, hitting 68.83 against the dollar on August 28, 2013.
“As he confronted capital outflows, the rupee at record lows, and over-blown but palpable, fears India was marching towards an Asia-crisis style abyss, Rajan duly administered tough monetary medicine to ailing bond and currency markets,” said Euromoney.
Rajan took several steps to attract capital flows which helped the rupee strengthen. It is now trading in the narrow range of 60-62 per dollar.
“Remarkably, the internationally-renowned economist, who earned acclaim for his warnings in 2005 of an upcoming global crisis of sorts, has, for the past year, been true to his word.”
After tackling the currency crisis, Rajan’s next task was to tame inflation, which stayed close to the double-digit mark for more than three years. He resolved to bring down inflation – evident from three rate hikes between September 2013 and January 2014, accompanied with a hawkish stance that has helped CPI-based inflation register its slowest growth in September, since the series was launched in January 2012.