In what is likely to appease the pro-growth lobby, Japanese brokerage Nomura has opined that most names being considered to fill the post of RBI governor have a neutral-to-dovish stance on fighting in
In what is likely to appease the pro-growth lobby, Japanese brokerage Nomura has opined that most names being considered to fill the post of RBI governor have a neutral-to-dovish stance on fighting inflation, unlike the incumbent Raghuram Rajan whose hawkishness is well known.
“The majority of candidates under consideration to replace governor Raghuram Rajan appears to have a neutral-to-dovish bent, unlike Dr Rajan, who was considered relatively hawkish,” its economists said in a note.
The note, however, added that even though the personal preferences of Dr Rajan’s successor can change the direction of monetary policy, RBI’s monetary policy agreement with the government and setting up of the monetary policy committee can limit his or her influence.
“Nevertheless, the next RBI governor has his/her work cut out in terms of establishing his/her individual credibility and in re-affirming the RBI’s independence,” the brokerage said.
Among the speculated candidates, it said current chief economic advisor Arvind Subramanian, NITI Aayog deputy chairman Arvind Panagariya and SBI chairman Arundhati Bhattacharya are the “doves” in the pack. Economic affairs secretary Shaktikanta Das and former RBI deputy governors Subir Gokarn and Rakesh Mohan are known to be “neutral” in their stance.
Current deputy governor Urjit Patel, whose recommendations have practically guided the monetary policy, is an inflation “hawk”, according to the brokerage.
Dr Rajan’s strong anti-inflationary stance, which led to three rate hikes after his taking over, had got the RBI a lot of flak for not doing enough to push sagging growth.
