Central bank chief keeps everyone guessing

MUMBAI • The chief of India's central bank has joked that it would be "cruel" to end intense speculation surrounding his future as he held interest rates in the country.

The Indian media is abuzz with predictions about whether the popular central banker will be given a second term as governor.

"It would be cruel of me to spoil the fun the press is having," Mr Raghuram Rajan told reporters following the Reserve Bank of India's monetary policy review meeting. "In all such cases the decision is reached after discussions between the government and the incumbent. I'm sure you will know when there is news."

Mr Rajan, often dubbed "Rockstar Rajan", enjoys a mass appeal in India not normally associated with a banker, with one newspaper even comparing him to James Bond.

Yesterday, the central bank held its key interest rate at a five-year low, citing inflationary fears ahead of the imminent monsoon rains. The bank also said it would keep the benchmark repo rate, the level at which it lends to commercial banks, at 6.5 per cent. In the same month, inflation quickened more than expected as consumer prices rose 5.4 per cent from a year earlier, driven up by higher food prices.

"The inflation surprise in the April reading makes the future trajectory of inflation somewhat more uncertain," Mr Rajan said yesterday.


A version of this article appeared in the print edition of The Straits Times on June 08, 2016, with the headline 'Central bank chief keeps everyone guessing'. Print Edition | Subscribe