Will markets' love affair with Raghuram Rajan endure?

In his five-year stint as the governor of the Reserve Bank of India, Duvvuri Subbarao developed a sort of an image of Paul Volcker, the legendary Fed chief and inflation fighter in the early '80s.

In their times, both Volcker and Subbarao were often at the receiving end of critics who accused them of being too single-minded in their inflation-fighting, interest rate-increasing ways, and being oblivious to the side effects a tight monetary policy leaves -- a fall-off in growth.

Yet strangely, the Indian markets have so far been more tolerant of current RBI governor Raghuram Rajan -- who appears to be even more focused in his pursuit of curbing prices than his predecessor -- than it is generally with central bankers perceived as "hawks".

Also read: Raghuram Rajan: Destiny's child or beginner's luck?

While Subbarao gained notoriety for increasing interest rates a staggering 13 times in a little over two years to try and bring down inflation, Rajan looks keen to complete the job his predecessor left unfinished and has hiked rates thrice in the five months since he took over.

But unlike full-blown critical pieces railing against the "partisan" focus of the previous governor by market experts, one would be hard-pressed to find too many people attacking Rajan, who has generally been described in glowing terms such as “pragmatic” and “dynamic”.

The reasons could be many: it could be too soon to read into his moves, or curiously, the fact that he is "surprising" markets, which expected him to resort to innovative ways to curb inflation, shows him to be an unconventional central banker.

Or maybe the suave Rajan provides a better explanation of his moves compared to his soft-spoken predecessor or that he carries a bigger profile -- being a former IMF chief economist and one of the prophets of the global financial crisis.

It could be a mix of all the above.

The governor has been more eloquent in defending his monetary policy stance. He recently asked media persons to not straitjacket central bankers into labels of "doves" or "hawks" and described himself as an intelligent "owl" that does what is required.

After raising rates for the third time, Rajan at a press conference patiently explained monetary policy was not an either-or affair -- that you're on the side of fighting inflation or boosting growth.

“It is only by bringing down inflation to a low and stable level that monetary policy can contribute to reviving consumption and investment in a sustainable way,” he said. “The so-called trade-off between inflation and growth is a false trade-off in the long run.”

Rajan's words bear themselves out with support from historic evidence: After Volcker was done in his job, he set the US economy up on track for years of benign inflation and laid the foundation of a 20-year bull market in which the Dow leapt from 1,500 levels to 12,000.

But in the interim, it will be interesting to see how long the market is willing to put up with a rate hike-happy central banker who recently said at an event: "It is better to be boring and do what is conventional because if you try the unconventional, you may create a whole set of new problems."

And the market, as we know, is not too fond of “boring”.