Appointed governor of the Reserve Bank of India last year, long-time faculty member at Chicago Booth, Raghuram Rajan, has now been named as Euromoney’s Central Bank Governor of the Year for his work over the past 12 months.
"It is nice to be recognized, but everything in India is still work in progress. The economy is turning around and I hope we will see it take off soon on the back of on-going reforms,” Raghuram Rajan said in a press release for Chicago Booth.
Recognition doesn’t appear to be a problem for Rajan in India, where his charisma and reformist stance have brought him domestic acclaim to the point of celebrity status in local media, according to Euromoney. Its annual award is based on an assessment of the impact a governor’s decisions have on a country’s economic and financial achievements.
Rajan is on leave from Chicago Booth for the duration of his Reserve Bank of India posting, which is typically five years. An MBA alumnus of IIM Ahmedabad, he joined Chicago Booth initially as an assistant professor of finance in 1991, having completed a PhD at MIT.
In 2003, he co-authored Saving Capitalism from the Capitalists with fellow faculty member, Luigi Zingalesbefore publishing Fault Lines: How Hidden Fractures Still Threaten the World Economy in 2010.
Raghuram Rajan’s teaching and research into banking, corporate finance and economic development at Chicago Booth was broken up once before his appointment to the Reserve Bank of India - between 2003 and 2006 he worked as chief economist for the International Monetary Fund (IMF), before returning to the school under the new mantle of Distinguished Service Professor of Finance.
In an in-depth feature, Euromoney describes the conditions Raghuram Rajan faced when stepping into the Reserve Bank of India role as a “baptism of fire” – inflation had brought the rupee down to historic lows and there was a poor outlook on growth.
Rajan responded with a plan to tighten monetary policy and thereby stabilize the rupee and contain inflation. The strategy involved raising rates, a calculated gamble that surprised many but has reaped dividends. 12 months on, inflation is down and the rupee has gained 10% against the dollar year-on-year.
“The key plank of this strategy was to send a very strong message about inflation. In that process, you don’t kill growth,” the man now hailed by local media as a ‘rock star’ told Euromoney.
Tim is a writer with a background in consumer journalism and charity communications. He trained as a journalist in the UK and holds degrees in history (BA) and Latin American studies (MA).
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