Reserve Bank of India: Inflation hawk Urjit Patel to take top job

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Urjit Patel attends a news conference in Mumbai, India, 2 FebruaryImage source, Reuters
Image caption,
Mr Patel moves from deputy governor to governor

Urjit Patel has been named as the new governor of the Reserve Bank of India - the country's central bank.

Mr Patel, currently deputy governor, is a one-time Yale University economist who worked at the International Monetary Fund (IMF) in the early 1990s.

He is known to be very hawkish on inflation, which remains one of the big worries in the Indian economy.

Mr Patel replaces Raghuram Rajan whose term, which was at times controversial, ends on 4 September.

Mr Rajan had been expected to stay for a second term but decided to return to academia.

Inflation hawk: analysis by Simon Atkinson, India Business Editor, Mumbai

Image source, Reuters

This appointment ends months of speculation over who would get one of India's highest-profile jobs. Mr Patel represents continuity and a safe pair of hands.

Outgoing governor Raghuram Rajan was one of the world's most well-known central bankers. The new man has less of a global reputation but enough credentials that international investors - so key to India's economic growth - are unlikely to be worried.

And the government of Prime Minister Narendra Modi, which has been agonising over this decision for a while, is likely to feel comfortable too. Mr Rajan riled some politicians for weighing into debates seen as being outside the role of a central bank governor - be that tolerance among different religions or the lavish lifestyle of indebted businessmen. Mr Patel will be expected to be lower-key and more conventional.

This is a nation whose food prices can fluctuate widely, often depending on the weather. And for hundreds of millions of Indians being able to afford basic vegetables and pulses is a major concern.

Media caption,

Sameer Hashmi on Rajan's decision to leave.

However, in a recent interview with the BBC, Mr Rajan denied having ever been publicly critical of Mr Modi's government.

Mr Patel takes charge at a time when India has the fastest-growing major economy in the world and its currency, the rupee - which hit record lows in 2013 - is more stable.

And while there have been concerns about inflation rates creeping up as oil prices recover and food costs rise, many expect the central bank to cut interest rates later this year to help stimulate more growth.