Governor courageous
Yaga Venugopal Reddy has always kept his cool despite an action-packed five years at Mint Street that saw humungous levels of dollar inflows, an unusual rise of the rupee against the greenback, soaring inflation and also overflowing consumer credit in the economy.
Yaga Venugopal Reddy has always kept his cool despite an action-packed five years at Mint Street that saw humungous levels of dollar inflows, an unusual rise of the rupee against the greenback, soaring inflation and also overflowing consumer credit in the economy.
But his biggest achievement was the way he resisted pressure from North Block and from India Inc. on interest rates. Reddy, the 21st Governor of the Reserve Bank of India, was always bombarded with multiple options just before every quarterly review on the interest rates. The Governor’s decision to move cautiously on key policy issues prevented the formation of an asset bubble in the economy. Today, everybody knows what happened in the US, where the previous Chairman of the Federal Reserve pushed rates to a low of 1 per cent.
Of late, Reddy, a 1964 batch officer of the Indian Administrative Service, has been busy tackling “imported inflation” emanating from soaring crude and high food prices. Here again, he has shown no haste to please his political masters, many of whom wanted him to hold, or even lower, interest rates in order to spur growth. Instead, he has cautiously raised the cost of funds to cool down demand, and, at the same time, avoided sharp interest rate hikes on the premise that they would boomerang and result in a series of defaults in consumer loans where people (and also banks) have overstretched themselves.
He completes his five-year term on September 5, 2008. The economy is slowing down and inflation is still an area of high concern. There is some speculation that the government wants him to continue in office, but he has not yet indicated whether he wants to do so. Meanwhile, the names of bureaucrat D. Subbarao and RBI Deputy Governor Rakesh Mohan are doing the rounds as his possible successor. Whoever succeeds him at RBI’s Shaheed Bhagat Singh Office, will have his hands full.
Whatever happens, Reddy will be remembered as a courageous RBI Governor.
—Anand Adhikari
But his biggest achievement was the way he resisted pressure from North Block and from India Inc. on interest rates. Reddy, the 21st Governor of the Reserve Bank of India, was always bombarded with multiple options just before every quarterly review on the interest rates. The Governor’s decision to move cautiously on key policy issues prevented the formation of an asset bubble in the economy. Today, everybody knows what happened in the US, where the previous Chairman of the Federal Reserve pushed rates to a low of 1 per cent.
 Name: Yaga Venugopal Reddy Age: 66 Designation: Governor Institution: Reserve Bank of India |
He completes his five-year term on September 5, 2008. The economy is slowing down and inflation is still an area of high concern. There is some speculation that the government wants him to continue in office, but he has not yet indicated whether he wants to do so. Meanwhile, the names of bureaucrat D. Subbarao and RBI Deputy Governor Rakesh Mohan are doing the rounds as his possible successor. Whoever succeeds him at RBI’s Shaheed Bhagat Singh Office, will have his hands full.
Whatever happens, Reddy will be remembered as a courageous RBI Governor.
—Anand Adhikari
