Thursday, September 5, 2013

Welcome Mr. Rajan!

So today, the rupee pulled back - more than a rupee!   RBI had to intervene... but it is what happened within RBI that made the market spike back, relatively.  Everybody has expectations - considering that the government, the finance ministry, the RBI seem to have got stuck into a black-hole and lacking ideas.  Yes, there is more hope now.

I don't want to jump the gun personally, but arguably, if there was ever a positive breeze in the last decade in the RBI corridors, it is now.

How?   The credentials - education, experience, the freshness all in a package. Already, as this blog is being published, the market is reacting positively.   But then the markets are known to be knee jerk, but it has been sometime that the knee jerk has been positive.

The rupee and the economy
are going to go through uncertain times
for the next 24 months
And the context of this positiveness is not lost.  We are just months away from the general elections.  The forthcoming budget would be that of a lame-duck government, and  limited in time and scope.

Then comes the great fat Indian election.  As the caravan stops and the dust settles, the year of 2014-15 would be history.   The real budget, if the government is in a position to present ( as we all expect a fractured mandate again), it would be the 2015 - Feb budget that would make some sense of economic and fiscal direction that this country is going to take.

To realize the 2015 budget into action, it would be another six months.   So technically, we are seeing about 24 months or 8 quarters of wobbly economy and lacking direction.  The currency, the GDP, the inflation, the stock markets - all would be subject to this uncertainty.
Mr. Rajan, this is a chance to lead Indian economy
 for the next 24 months

In this entire journey, the only stable policy making body would be the RBI.  Therefore, Mr. Rajan, we expect your stewardship to rise over this period of glorious uncertainty, and worst case, help us keep our head above water.

The country has already lost 5 years in dealing with lack of policy making and scams - and the global faith in Indian economic fundamentals and climate has taken a beating.

Here is your chance, to make a big difference, therefore.   Welcome aboard, Mr. Rajan.

- Ashok Speaks


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