Why Christine Lagarde said Raghuram Rajan is 'Not Bad'

File Photo: Christine Lagarde with Raghuram Rajan
File Photo: Christine Lagarde with Raghuram Rajan

International Monetary Fund or IMF chief Christine Lagarde on Monday while addressing students at Delhi's Lady Shri Ram College for Women jocularly called Reserve Bank of India (RBI) Governor Raghuram Rajan 'not bad'.

"Your RBI Governor was a chief economist at IMF. He's not bad, he's pretty good," Ms Lagarde said while addressing the audience that had student representatives of 20 colleges from the capital.

Ms Lagarde's witty remark about Dr Rajan received a thundering applause from the crowds in the audience.  
She spoke about Dr Rajan - who's as acclaimed for his economic insights as for his suave mannerism - while pitching for more economists from India, especially women to join the IMF. "I want more women economists from India," she said.

Dr Rajan was the chief economist at IMF from September 2003 till January 2007. He came into global limelight for his prediction of the 2008 global financial crisis. In his paper titled Has Financial Development Made The World Riskier?, which he submitted in November 2005, Dr Rajan wrote: "But perhaps the most important concern is whether banks will be able to provide liquidity to financial markets so that if the tail risk does materialize,..." The response to this paper was negative.

Ms Lagarde took over as the head of the Washington DC headquartered global organisation in July, 2011.

Ms Lagarde said she would meet the central banker who has been dubbed ''The Guv" and "Rockstar Economist" in the media, on Tuesday.

When quizzed on whether Dr Rajan should cut rates to spur growth, the IMF chief said that it was entirely the RBI Governor's call. "I want to be very respectful of what Raghu (Rajan) does," Ms Lagarde said.

She further joked that what she tells him "is private", which attracted loud laughter from the students in attendance.

Dr Rajan took over the reins of the RBI in September 2013, at a time when the currency was trading at record-lows and inflation was in double-digits. Since he took charge, not only has the rupee stabilised, but India has managed to get the better of inflation in its longstanding fight with rising prices.