I decide monetary policy, govt can fire me if it wants: Rajan
10 May 2014 12:08 AM GMT
Reserve Bank of India (RBI) Governor Raghuram Rajan said on Friday it is he who determines the monetary policy and the government can fire him if it wants. ‘I determine the monetary policy. I say what it is. The government can fire me but the government doesn’t set the monetary policy. So, in that sense, am I independent! Well, I am happy to talk to the government. I am happy to listen to the government but ultimately the interest rate that is set is set by me,’ he said at St Gallen Symposium in Switzerland.
Rajan was replying to a question that was broadcast on Bloomberg TV during a programme on how much independence and real power he enjoys as RBI Governor. The central bank, he said, works with the Finance Ministry and he has regular conversations with the Finance Minister. ‘We (the RBI) control the monetary policy. In India, what happens is when we want to do something big, we go, tell the government this is what we want to do and the government is usually supportive.... We talk to each other,’ he said.
There is speculation the RBI Governor might be changed if the Narendra Modi-led NDA comes to power after the elections. The nine-phase election is under way and counting of votes is scheduled on May 16.
Rajan was replying to a question that was broadcast on Bloomberg TV during a programme on how much independence and real power he enjoys as RBI Governor. The central bank, he said, works with the Finance Ministry and he has regular conversations with the Finance Minister. ‘We (the RBI) control the monetary policy. In India, what happens is when we want to do something big, we go, tell the government this is what we want to do and the government is usually supportive.... We talk to each other,’ he said.
There is speculation the RBI Governor might be changed if the Narendra Modi-led NDA comes to power after the elections. The nine-phase election is under way and counting of votes is scheduled on May 16.
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