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Reserve Bank of India (RBI) Governor Raghuram Rajan addresses a press conference at the RBI headquarters in Mumbai, India, Friday, Sept. 20, 2013. India's new central bank chief unexpectedly raised interest rates Friday, putting a higher priority on taming stubbornly high inflation than bowing to pressure to juice the struggling economy with cheap credit.
Reserve Bank of India (RBI) Governor Raghuram Rajan addresses a press conference at the RBI headquarters in Mumbai, India, Friday, Sept. 20, 2013. India's new central bank chief unexpectedly raised interest rates Friday, putting a higher priority on taming stubbornly high inflation than bowing to pressure to juice the struggling economy with cheap credit.
(Rajanish Kakade/AP)

BREAKINGVIEWS

India’s rate-raising central banker emulating Paul Volcker

Reuters Breakingviews delivers agenda-setting financial insight. Its global correspondents react to stories as they develop, delivering sharp and provocative commentary on big financial news as it breaks.

Raghuram Rajan, India’s new central bank chief, wants to be his country’s Paul Volcker. The former Federal Reserve chairman’s tight monetary policy tipped the U.S. economy into recession in the early 1980s, but succeeded in curbing double-digit inflation rates. Following in his footsteps, Mr. Rajan raised the monetary authority’s key policy rate by 25 basis points on Sept. 20.