Tuesday, November 1, 2016

India's Raghuram Rajan was one of few Central Bankers to call out the US Fed

I was an admirer of former Reserve Bank of India governor, Raghuram Rajan. He understands the problems of money printing. He was one of the very few central bankers to criticize the US Fed policies though most of the other central bankers did not. That he left, is a negative for India. Although I understand that Urjit Patel is a reasonably hawkish central banker as well.

In emerging economies, politics plays a significant role, because on the margin the markets are driven by foreign buyers. So if you get more foreign money in, the markets are likely to go up. And foreign investors do pay attention to political developments. In case of India, they will watch the reform process of the Narendra Modi-led government very closely.