Rexit: How Foreign Media Is Covering Raghuram Rajan’s Departure

‘Rexit’ refers to RBI Governor Raghuram Rajan’s decision to not continue for a second as governor.

Reserve Bank of India (RBI) Governor Raghuram Rajan (Photo: Reuters)

India is not alone in reeling from the shock the RBI Governor Raghuram Rajan delivered to the country on Saturday. In an open letter to his staff, Rajan announced that he will be returning to academia after his term ends in September.

Countries around the world seem to be just as invested in this surprise announcement, as they look at India as a significantly growing economy in the market.

Here’s a look at the international media’s coverage of Rajan’s decision:

The Business Insider

In a piece titled ‘Inside the ‘constant quibbling’ and drama that led to India’s central bank chief’s departure’, the American news website was quick to point out the strangeness of Prime Minister Modi and senior party leaders’ silence on the issue:

“Modi has not commented, tweeting instead on Sunday about the forthcoming World Yoga Day. Jaitley had been in his office on Saturday and gave no indication of concern about Rajan’s future, leaving for home before the news broke, an aide said. The finance minister tweeted after a delay of more than two hours that he respected Rajan’s decision.”

The publication also alluded to the rather public attacks on Rajan by senior BJP leaders, as a reason for Rajan’s decision:

“When Rajan decided to leave, he did so without warning and on his own terms: in a sign of growing tensions he did not inform top members of the government before releasing an open letter to staff on Saturday, a move that took investors and the government by surprise.”

CNN Money

The business website CNN Money also provided context to the possible tensions with the NDA during Rajan’s tenure:

“Rajan was made head of the central bank while the Congress Party was in power, and there have been questions over the level of support he enjoyed from the ruling Bharatiya Janata Party (BJP).”

Subrmaninan Swamy wrote an open letter to the PM criticising Rajan. (Photo: Reuters)

The Wall Street Journal

The United States’ biggest business publication, The Wall Street Journal in a piece titled ‘Investors Concerned Raghuram Rajan’s Departure Could Rattle Markets’, pointed out the implications of Rajan’s decision. Like the other publications, WSJ also alluded to the mounting hostility toward Rajan from senior BJP leaders, as a possible reason for his decision.

“But those same traits at times put him at odds with some members of Mr Modi’s Bharatiya Janata Party, which has deep roots in Hindu nationalism, who questioned his patriotism and lambasted him for not moving more quickly to cut interest rates.”

The publication pointed out the visible boost in India’s economy since Rajan was appointed to office:

“India is now the fastest-growing major economy in the world, since a revision in the way it calculates its gross domestic product, and Mr. Modi and other national leaders cite that ranking repeatedly in speeches at home and abroad.”

The Washington Post

The publication called Rajan “India’s Rockstar” in a piece titled ‘India’s ‘rock star’ central banker quits, and his fans are devastated.’

“He has been called India’s rock-star banker, even compared to James Bond. But his relations with Prime Minister Narendra Modi’s government have been choppy. Commerce and Industry Minister Nirmala Sitharaman criticized him in April for his choice of words when he described the Indian economy as “the one-eyed man being king in the land of the blind.”

The Reserve Bank of India (RBI) Governor Raghuram Rajan (Photo: Reuters)

The Financial Times

The Financial Times too echoed a similar rhetoric of “India’s Rockstar”, by comparing him to James Bond:

“Central bankers are rarely compared to James Bond, the fictitious British spy. But Raghuram Rajan, the respected Reserve Bank of India governor credited with restoring the country’s macroeconomic stability, is not your typical emerging markets central banker.”

The paper pointed out that Rajan’s personality may have been the reason for frequent abrasions with the ruling party:

“But Mr Rajan’s larger-than-life image, his plain speaking and his willingness to tackle tough issues head on may well have cost him his job.”  

Rajan is the first RBI Governor since 1992 who has not been offered a second term in office. After his term ends in September, he will go back to his job as an Economics professor at the University of Chicago.

Also Read:
Indian Economy Loses by Losing Raghuram Rajan: Politicians React
‘Sad’, ‘Disappointed’: Industry Reacts to Raghuram Rajan’s Exit