India picks IMF expert to head its central bank

Marion Dakers
INDIA picked the former chief economist at the IMF to head its central bank yesterday.

Raghuram Rajan, known for predicting the credit crunch two years before it began, will start a three-year term at the Reserve Bank of India in September.

Rajan served as the IMF’s top economist from 2003 to 2006, during which time he warned that the financial sector was ripe for a crisis. He later wrote “Fault Lines”, an acclaimed book on the topic.

The 50-year-old took an advisory role with India’s finance ministry last year.

Rajan’s first tasks will include trying to get a grip on the rupee, which is down 11 per cent against the dollar so far this year in spite of the central bank’s intervention.

The Indian economy grew 4.8 per cent in the first quarter of 2013, the slowest rate in almost five years. “These are challenging times for the Indian economy, though no one can have any doubt about the country’s promise,” Rajan said yesterday.