REXIT Impact: Flipping the Coin
Prerana Priyadarshi · 29 Aug, 2016 · 263 · Issue Brief
On 18 June, 2016, the 23rd Governor of Reserve Bank of India (RBI), Raghuram Govind Rajan announced his exit (popularly referred to by the acronym Rexit). This announcement was received negatively by most of the country's financial community. However a closer reading of the governor's tenure does not lend itself to such a uniformly negative interpretation, being as it was - a mixed bag.
With impressive and global credentials under his belt, Rajan on September 5, 2013 took charge as the successor of Duvvuri Subbarao. When he took over, the Indian economy was labelled as one of the Fragile Five economies in 2013 with interest rates (repo rate) at 7.5 per cent, inflation at an average of 10.92 per cent and the Rupee (INR) valued at INR 63.79 to the US Dollar (USD). All these factors were keeping economy under stress.
On the path to resuscitate the economy, the RBI under Rajan took some important decisions. However, some of his decisions turned out to be double edged swords.