India to lose outspoken central banker as Viral Acharya resigns

Bloomberg

The Reserve Bank of India (RBI) will lose one of its most outspoken officials, raising further questions about the independence of the central bank six months after the governor resigned under a cloud.
Deputy Governor Viral Acharya has asked to leave the central bank, citing “unavoidable personal circumstances,” the RBI said in a statement on Monday. His resignation request, which was submitted a few we-eks ago, is under consideration, it said. His three-year term was due to end in January 2020.
Acharya, who was in charge of the monetary policy department, will return to New York University in August as an economics professor, the Business Standard newspaper reported earlier. He is on leave from NYU’s Stern School of Business.
A monetary policy hawk, Viral Acharya defended the central bank’s independence in a hard-hitting speech last year, bringing to light the tension between the government and monetary policy
makers which eventually led to Urjit Patel’s sudden departure as governor in December.
Central bankers globally are coming under attack from politicians, with the most high-profile being US President Donald Tru-mp’s persistent criticism of Federal Reserve Chairman Jerome Powell for his performance.
“Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire and come to rue the day they undermined an important regulatory institution,” Acharya said in his October speech.
Patel quit last year following a clash with the government on issues including lending rules and interest rates.
The RBI under his successor, Shaktikanta Das, has cut interest rates three times and given up its tight policy stance.
Acharya, 45, was the only deputy governor on the six-member monetary policy committee, and his exit leaves the door open for more easing to support a slowing economy. Acha-rya’s vote for a rate cut at the June meeting was in his own words, done with “some hesitation.”