Indian central bank: In his three years as governor from 2013 to 2016, Raghuram Rajan restored calm to Asia’s No. 3 economy, William Pesek writes. In short order, the former IMF economist tamed inflation, stabilized the rupee, worked to reduce bad loans in the banking system and talked credit-rating companies out of downgrading New Delhi. And then, in September 2016, Rajan, who’s often listed among Nobel Prize candidates, was out of a job. The popular excuse: he was too slow to cut interest rates. Prime Minister Narendra Modi opted instead for Urjit Patel, Rajan’s deputy. Fears that Modi had hired a yes-man seemed confirmed by the demonetization debacle of November 2016. Dozens literally died scrambling to exchange their life savings as 86% of currency in circulation was suddenly ruled useless. Dismal logistics cratered national growth rates and dented Modi’s reputation for competence. It remains to be seen whether Patel can turn things around and rehabilitate the Reserve Bank of India’s credibility. READ THE STORY HERE
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