RBI chief Subbarao gets 2-yr extension, FM says doing good job

New Delhi, Aug 9 (PTI) The Indian government on Tuesday
gave a two-year extension to Reserve Bank Governor D Subbarao
to ensure continuity of India's monetary policy at a time when
the whole world is reeling under the fallout of the downgrade
of the sovereign rating of the US.
"It (extension) will be good because at this point of
time, extension of the RBI Governor is needed. Though there
was time till September, we decided (that) we should do it
quickly to ensure that there is no uncertainty," Finance
Minister Pranab Mukherjee told reporters after announcement of
Subbarao's extension as head of the country's monetary
authority.
Subbarao, who has played a key role in steering the
country out of the global financial meltdown following the
fall of America's iconic investment banker Lehman Brothers in
September, 2008, will continue as RBI chief till September 5,
2013.
"He (Subbarao) is doing good job and he has already
earned his reputation as central bank Governor in the various
deliberations of the G-20, where Finance Ministers and central
bank governors meet and take decisions," Mukherjee said.
Subbarao was to retire in September following the
completion of a three-year term. "The Prime Minister approved
the extension to D Subbarao, Governor of RBI, for two years,"
a PMO spokesman said.
The 61-year-old former IAS officer, who had also served
as Finance Secretary, was appointed the 22nd Governor of the
central bank in September, 2008.
The continuation of Subbarao at the helm of the RBI
assumes significance as it comes at a time when the government
and the central bank are gearing up to meet the challenge
posed by the economic crisis in several eurozone nations and
the downgrade of the US sovereign rating to AA+ from AAA by
Standard and Poor's.
The downgrade triggered a steep fall in stock markets
throughout the world, including the BSE and NSE in India.
Subbarao, who steered the country through the economic
crisis of 2008, is credited with taking a tough monetary
stance to check inflation.
It was under his leadership that the RBI increased key
interest rates 11 times in the past 16 months to control the
rate of price rise, despite stiff resistance from industry.
Under his governorship, the RBI had doubled the frequency
of monetary policy reviews from every quarter to eight times a
year with a view to decrease the need for off-cycle rate
moves.
Subbarao had earlier served under Manmohan Singh in the
Finance Ministry as a senior official in the early 1990s, when
the latter was Finance Minister.
Prior to this appointment, he was the country's Finance
Secretary.