Raghuram Rajan says economy can overcome challenges

India faces a challenging environment but it can be overcome, the country's chief economic adviser Raghuram Rajan told journalists after a board meeting of the Reserve Bank of India (RBI).

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50-year old, Rajan, who as IMF economist had predicted the 2008 global crisis, was appointed the new RBI Governor on Tuesday. He will succeed D Subbarao, who by his hawkish policy stood his ground on continuing with a tight monetary policy despite repeated entreaties from the government to ease interest rates to boost growth.
"In the last two months, he (Rajan) has been taking a key role on rupee-related steps, and his appointment as the governor will lift expectations of constructive and positive steps to lift the rupee," said Siddharta Sanya, an economist for Barclays in Mumbai.
Possible quick fixes, including raising money from Indians abroad or pushing state-run banks and companies to sell dollar debt, remain potentially expensive in a global environment no longer favouring emerging markets. With inputs from agencies