New Delhi: As soon as the report stating Reserve Bank of India Governor Raghuram Rajan's refusal to continue his term at the Central Bank started doing the rounds of media, the forex markets came crashing down. The rupee closed at a one-week low at 67.45 per dollar.
The report by the leading Bengali daily Anandabazar Patrika said Rajan has told the central government that once his term ends in September this year, he would return to the United States. Quoting sources close to Rajan, the daily said he has plans to join an American University and pursue research on the Indian economy.
However, government officials rejected the claim made by the report and termed it a mere speculation. Speaking to a television channel, they said, "Whenever any decision is taken, it will be known. No point in any speculation."
The suspense over re-appointment of the RBI governor has kept the foreign investors on edge.
Rajan recently came under a strong attack from the BJP leader Subramanian Swamy who demanded he be sacked. However, Rajan found support from several industrialists and think tanks around the world who believe that he is one of the finest economists.
They pointed out that Rajan had stuck to the path of reforms ensuring that India moved ahead on a growth trajectory.
