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Reddy takes over as RBI governor
September 06, 2003 12:41 IST
Last Updated: September 06, 2003 14:48 IST
India's executive director in the International Monetary Fund and a shrewd banking strategist, Yaga Venugopal Reddy on Saturday took over as the 21st governor of the Reserve Bank of India.
Reddy takes over at a time when the economy is looking up, with strong fundamentals and comfortable balance of payment position coupled with burgeoning forex reserves at over $85 billion.
He succeeds Bimal Jalan, who with his astute macro-economic managment has brought stability to the rupee besides moving the economy towards a soft interest rate regime.
Jalan, who has been nominated to the Rajya Sabha, relinquishes the top central bank post after six years.
Reddy is possibly the first RBI governor to have been given a five-year stint right at the beginning.
The new governor, who has served as banking secretary, is also an insider like C Rangarajan, having been elevated to the post of governor after serving as deputy governor in the central bank.
Both Rangarajan and Reddy had a stint outside the central bank before taking over the coveted post.
Immediately after assuming office, Reddy said there would be continuity in the management of macro-economy by the bank.
As an ardent advocate of economic reforms, Reddy said, "Continuity and change will be mixed appropriately depending on the context."
Referring to the monetary policy, Reddy said, "RBI believes in continuity."
Reddy has been given a five-year term to send out a signal of `continuity and stability', banking sources said.
Prior to his appointment in IMF in 2002, Reddy was RBI deputy governor since 1996. An IAS officer, he had looked after the department of economic analysis & policy, department of external investments and operations, and department of expenditure and budgetary control among other things.
He was closely associated with policy changes and had also been an advisor to the World Bank.
Jalan said, "He (Reddy) will change what I started and continue with what he had started."
Jalan said he would desire the Indian currency to become as good as the dollar, yen, pound strerling or the euro. It is upto Reddy now to fulfill the aspirations of Jalan.
Reflecting upon his tenure in the RBI, Jalan stated that foreign exchange was now not a constraint at all. Strong external position gave a sense of security and confidence in the entire country.
After a six-year tenure as deputy governor of RBI, Reddy, left the bank on July 31 last year to join the IMF as executive director.
Reddy will be hard pressed to address the needs of the industry to address the structural issues expeditiously.
Additional secretary in the economic affairs department of finance ministry, B P Mishra, is tipped to succeed Reddy in the IMF.
With his vast experience in banking, Reddy is expected to steer the economy to greater stability to insulate it from any possible external shocks.
Reddy, in the absence of Finance Minister Jaswant Singh, is expected to lead the Indian delegation to the World Bank-IMF annual meeting which is beginning in Dubai on September 21.
This would be his first major assignment as RBI governor.
From a debtor country, India has now graduated to a lender nation to the IMF.