Subbarao to say good bye to Mint Street after 5 stormy yrs
As wholesale inflation started inching downward this summer, the Governor, a topper in the Civil Service exam in 1972, was faced with problem of falling rupee. Rupee against the dollar has depreciated over 20 per cent in the last three months and is at present hovering over 65 to the greenback.
September 02, 2013 / 14:00 IST
As wholesale inflation started inching downward this summer, the Governor, a topper in the Civil Service exam in 1972, was faced with problem of falling rupee. Rupee against the dollar has depreciated over 20 per cent in the last three months and is at present hovering over 65 to the greenback.
Even though he took several measures in consultation with the government to contain the freefall of the rupee, its downslide continued. The currency inched close to 69 against dollar last week.The slide was triggered by the statement of Fed Chairman Ben Bernanke on May 22 that US may go in for quantitative easing later this year.Also read: New CPI narrow for monetary policy decisions says Subbarao"Admittedly, the speed and timing of the rupee depreciation have been due to the markets factoring in tapering by the US Fed, but we will go astray both in the diagnosis and remedy, if we do not acknowledge that the root cause of the problem is domestic structural factors," Subbarao said in his last public lecture as Governor.At the same time, growth in the first quarter of the current fiscal also plummeted to 4.4 per cent due to drop in mining and manufacturing output.Growth was at the slowest pace since the 2008 financial crisis, with all but one of the eight sectors registering a lower rate of expansion or contraction.These are problems his successor Raghuram G Rajan, Chief Economic Advisor to Finance Ministry and former economist of International Monetary Fund, has to tackle.Subbarao himself summed up his innings succinctly in his last speech. "May you live in interesting times. I can hardly complain on that count. I had come into the Reserve Bank five years ago as the Great Recession was setting in, and I am finishing now as the Great Exit is taking shape, with not a week of respite from the crisis over the five years." Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!