Tuesday, August 23, 2016

Urjit Patel is going to be India’s new central banker

Urjit Patel is going to be India’s new central banker
The Narendra Modi government has appointed Urjit Patel as the next Reserve Bank of India governor.

Patel is currently a deputy governor at the RBI and will succeed Raghuram Rajan. Rajan’s last working day as the central banker is Sept. 04. The 53-year-old will return to his teaching job at the University of Chicago.

The 52-year-old Patel, known to be close to Rajan, has studied economics at the University of London (pdf). He also holds a PhD in economics from Yale University and an MPhil from Oxford University.

In a career spanning over more than 30 years, Patel has had an assortment of roles—from working at India’s finance ministry to assessing macroeconomic risks as the president of business development at Reliance Industries. He also worked briefly at the International Monetary Fund.

Patel was appointed as the deputy governor of the RBI in 2013 and since then has been an important part of the monetary policy decision-making at the central bank.

He has also played a key role in setting up the inflation-targeting mechanism at the RBI, which means Rajan’s legacy of taming India’s sticky inflation problem would continue. Patel was one of the front-runners for the job along with India’s chief economic advisor Arvind Subramanian, NITI Aayog deputy chairman Arvind Panagariya and Arundhati Bhattacharya, chairman of the State Bank of India, the country’s largest lender, among others.

On June 18, Rajan announced that he won’t be continuing as the RBI chief. The decision came months after heated discussions across the media and among government officials about his second term. Some senior politicians also made personal attacks on Rajan and alleged that he slowed down the country’s economic growth by keeping interest rates high.

But Patel might not be any different when it comes to interest rates. After all brokerage Nomura has called him a “hawk”, or someone in favour of a tight monetary policy and high interest rates.

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