The verdict on Raghuram Rajan’s two years as the RBI governor


Emperor Napoleon is reported to have told his secretary Baron Fain, “In war, luck is half of everything.”

During his first two years in office, Raghuram Rajan, the Reserve Bank of India (RBI) governor, has had luck firmly on his side as he fought to tame the inflation dragon. When Rajan took office on Sept. 04, 2013, India was in an economic crisis, with the rupee having depreciated sharply, the current account deficit having widened to an alarming extent, and inflationary pressures still high.

As the RBI had been attempting to smooth the rupee’s sharp depreciation during the first half of 2013, India’s foreign exchange reserves had also been significantly eroded.

It has been the country’s good fortune to have such a capable economist with the highest international credentials taking the helm at the RBI at a time of economic crisis. With Rajan’s background as a former International Monetary Fund chief economist and a professor of finance at the University of Chicago…

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