Poonam Gupta: RBI’s new status-quo challenger

Subscribe to enjoy similar stories. Poonam Gupta’s appointment as the deputy governor of the Reserve Bank of India (RBI) could test the status quo on some of the regulator's policies and frameworks. This will be Gupta’s maiden policy-making role.

She entered RBI after spending a significant part of her career with the World Bank and the International Monetary Fund (IMF). Her prolific newspaper writings suggest that her views on policy matters are not always fully aligned with those of RBI and the government. Gupta is categorically opposed to the RBI’s exchange rate policy, and, as recently as last month, argued for letting the rupee depreciate more than the RBI has allowed.

Persisting with such an approach could at once get her into the BJP’s crosshairs. A stronger rupee and a muscular attitude in times of global economic tumult remain the party’s preference. Calmer times may be a long way off.

Trump's reciprocal tariffs will go into effect this week. A global trade war is imminent. The tensions could spill into financial markets worldwide.

The benchmark equity index Sensex and the Indian rupee are on a rollercoaster ride already. Things aren’t going to be quieter at home. After the completion of ten years of implementation, the RBI’s inflation targeting framework will be due for a review in 2026.

The RBI and government will kick off deliberations for which this year itself. Members of the RBI’s monetary policy committee (MPC), which Gupta is expected to join as deputy governor in charge, have in recent meetings, the minutes show, initiated a debate on what the inflation target, currently set at 4%, could be. For a long time, Gupta has been of the view that 4% inflation is too low for India and something like 5-5.5%