NEW DELHI, India, 24th Aug – The Indian government on Saturday named insider Urjit Patel as the new governor of the Reserve Bank of India, to replace popular central banker Raghuram Rajan when his term ends in September.
“Dr. Urjit R Patel new Governor of RBI,” Frank Noronha, principal spokesperson, Government of India posted on Twitter.
The appointment of Patel, currently the RBI’s deputy governor, ends weeks of feverish speculation by the Indian media since Rajan caught investors off guard in June by announcing he was stepping down to return to academia.
He is one of four deputy governors and was re-appointed in January this year for a three-year term.
Patel was born in Nairobi in 1963 and studied at Visa Oshwal Primary School and Jamhuri High School. His parents, Ravindra and Manjula Patel, ran a chemical factory in Nairobi.
The third-generation Kenyan-Indian later studied Economics at the London School of Economics, a Masters from Oxford University and got his doctorate in Economics from Yale University in 1990.
He has worked in different capacities and stations at the International Monetary Fund and the ministry of finance in India before he was appointed the Deputy Governor of RBI in 2013.
He currently runs the Indian central bank’s monetary policy department, working closely with outgoing governor Rajan who steps down on September 4.
A press note handed to reporters and seen by AFP said: “The Appointments Committee of Cabinet has approved the appointment of Dr. Urjit R. Patel as Governor, Reserve Bank of India (RBI) for a period of three years.”
The chief of the RBI is typically chosen by the prime minister in consultation with the finance ministry, making Patel the first governor to be chosen by rightwing Prime Minister Narendra Modi.
While many investors were disappointed in Rajan’s decision to step down, they are hoping that the new appointee will take a more dovish approach towards lowering interest rates.
India’s economy expanded by 7.9 percent in the fourth quarter of 2015-16, the fastest of any large economy, while inflation has fallen from double-digit levels to around six percent on Rajan’s watch.
But although interest rates are at their lowest level since 2011, there have been tensions with the ruling Bharatiya Janata Party which has been pushing for deeper cuts, saying these would boost growth further.