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What would the impact be if Governor Rajan stepped down?

Indian media has been awash with reports that RBI Governor Raghuram Rajan might not have his contract renewed when his term expires in September. In the unlikely case that this occurs, financial markets in India could come under pressure. The extent of the impact would also depend on who replaced him – the appointment of a finance ministry official, which some have suggested is likely, would raise concerns over the RBI’s independence and monetary policy credibility.

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