Foreign Market Hits Back On Report Of Rajan’s Refusal Of Term 2

June 01, 2016 18:00
Foreign Market Hits Back On Report Of Rajan’s Refusal Of Term 2

On the report published in the major newspaper that RBI governor did not want to be at central bank, Forex markets on today came to 1 week low as rupee against a dollar lowered down at 67.45.

After Anandabazar Patrika of Kolkata reported that Mr. Rajan would not want to continue his term as RBI governor and will be off to United States after his term expires in early September, citing sources close to him.

Although RBI has not replied on the issue, foreign investors are on the edge to know whether Mr. Rajan, a former chief economist at the International Monetary Fund, will be reappointed by the government for the second 2-year term.

According to many experts, Mr. Rajan will be there as RBI governor for the next two years as published by the Reuters. The experts have said that markets have not been hit significantly by fears of Rajan would leave in September. Raghuram Rajan, however, refused to comment on the issue saying it would be speculative to discuss.

“Some rumours that the governor may not go for a second term led to reducing of short positions," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank in Mumbai.

”Otherwise the rupee was expected to be strong today on the good GDP numbers,” he further added.

Mr. Raghuram Rajan is highly popular among the foreign investors who appreciated him for his efforts to lower down Indian’s inflation and clean up the massive loans on the state run banks.

However, he recently was attacked by the BJP MP Subramanian Swamy alleging that he’s not lowering the interest rates and he is not mentally fully Indian. Swamy had demanded immediate removal of the RBI governor.

By Prajakt K.

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