Monday, October 28, 2013

Raghuram Rajan’s Surprising First Move

Raghuram Rajan was recently elected as the governor of the Reserve Bank of India, and what do you think his first move was? While you might think Rajan, in his new role, would want to do something to win the approval of as many people as possible, what he did actually had the opposite effective, at least with certain business representatives. So, what did Rajan do? Well, he raised the benchmark interest rate from 7.25% to 7.5%, causing many people to be surprised and also causing many people to be quite angry.

So, what’s the deal with Rajan, you may be wondering. Does he just need to fire his accountant or advisor? Quite the contrary, Rajan knows exactly what he is doing. His reasoning for increasing interest rates is that he desires to limit India’s ability to engage in what he considers “unsustainable activities.” He meant, in other words, for the increase to serve as a warning.


While there’s a lot of debate over whether Rajan’s move was a smart one, one can’t argue with the fact that it was definitely attention grabbing to say the least! To find out more about Rajan’s financial beliefs and to see how they might affect your life, contact an accountant with Susan S. Lewis in Naperville. #NapervilleAccountant
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