The new RBI governor in waiting Urjit Patel, who will take over on 4 September, is already being hailed as the government’s best bet in keeping a tight lid on inflation, much like from outgoing governor Raghuram Rajan.
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Patel, who replaces Raghuram Rajan as the head of the central bank, is now the deputy governor responsible for the RBI’s inflation-targeting monetary policy framework.
One of four RBI deputies, Patel, 52, now runs the central bank’s monetary policy department, working closely with Rajan, who is credited with taming inflation and tackling India’s mountain of soured bank loans.
After obtaining his PhD, Dr. Patel joined the International Monetary Fund in 1990 worked on the USA, India, Bahamas and Myanmar desks at IMF till 1995. He was on deputation to the Reserve Bank from the International Monetary Fund between 1996 and 1997 after which he was a consultant (1998-2001) to the Department of Economic Affairs in the Finance Ministry.
“Institutional investors both domestic and foreign would welcome the appointment of Patel as successor to Rajan”. Also, he is in charge of the monetary policy department and advocating the more relevant consumer price index (CPI) and not the wholesale price index (WPI) as the inflation targetting benchmark.
“Having served as Deputy Governor in the past three years, Urjit Patel is well-positioned to further institutionalise these policy changes in the period ahead”, Rookmaaker said.
New RBI governor Urjit Patel will have to be on the ball from day 1: He has been given a September 15 deadline to put in place the monetary policy committee (MPC), top sources in the government told HT.
Some of Patel’s earlier assignments include Member of the Integrated Energy Policy Committee (2004-2006); Executive Director and Member of the management Committee, IDFC (1997-2006); Member of the board, Gujarat State Petroleum Corporation Ltd, and President (Business Development), RIL.
Considering his experience with RBI, Mr Patel was a front-runner for the coveted post for which the names of State Bank of India (SBI) chairperson Arundhati Bhattacharya, chief economic advisor Arvind Subramanian and even Niti Aayog’s vice-chairman Arvind Panagariya were being speculated upon. This committee will have three government nominated members along with the RBI deputy governor in charge of monetary policy, and an office member of the central bank. RBI’s next monetary policy review is due on October 4.
“I believe Patel will take the economy in the right direction”.
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‘Nevertheless, some of the dovish sentiment that had crept into the market will likely be re-priced given that Dr Patel is viewed as being more hawkish, therefore yields could correct slightly higher in the near term’.
