Governor Rajan to step down, all eyes now on successor

The announcement from RBI Governor Raghuram Rajan that he will stand down at the end of his current contract in September is likely to put local financial markets under pressure in the near term. However, the long-term market impact will depend on who is chosen as his successor. 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.