Within two weeks of his taking over as Governor of the Reserve Bank of India, Lehman Brothers meltdown surfaced on 15th September 2008, marking the beginning of the Global Finacial Crisis of 2008. So, Dr. D. Subbarao, author of “Who Moved My Interest Rate”, definitely began his term in ‘interesting’ times. It didn’t end  there. In a week of his reappointment in 2011, the Eurozone Sovereign Debt Crisis occurred. At the end of his term in 2013, the ‘taper tantrums’ had led to the free fall of the Indian Rupee.

So, it was indeed ‘baptism by fire‘. As a bureaucrat of almost 30 years, from a District sub-collector to the Finance Secretary with the Government of India, he must have seen it all. Apparently not! As he learnt in the five years that followed, he had the immense capacity to ‘move markets’ with his ‘spoken word’ so much so that he almost detests it. He writes – “One of the stressful things about being a central bank governor is that the markets hang on every word you say, treating every syllable, nuance, and twitch of the face as a market cue. That about sums up both the opportunity and challenge of central bank communication.­”


Having been the Finance Secretary, Dr. Subbarao elaborately expresses his understanding of the political compulsions of the government to criticise his decisions to raise interest rates while simultaneously chiding the finance ministers of his time for having been almost unforgiving to him for doing his job.

Over time, he became the face of the RBI defending its autonomy from whims of the political executive. He readily admits the inadequacy and lack of formal mechanisms of parliamentary accountability of the institution he so proudly served. “An institution like the Reserve Bank that jealously guards its autonomy should also zealously render accountability fo result” – says a lot about the sheer sense of  public service that he personifies.


He elucidates in fascinating detail the measures he took for outreach and financial literacy. Initiatives like townhalls that helped his understand the ‘gaps between policy and implementation’ that seldom receive attention in the ‘glamour’ of monetary policy. While he himself travelled extensively, he sent deputy governors and other members of senior management to remote parts of the nation to understand the ‘psychology of poverty and sociology of village life.’

Dr. Subbarao, a topper in the Civil Service exam in 1972, repeatedly cites media articles both to validate and criticise his policy decisions. He has shown huge respect to the media in the role they play in disseminating RBI policy to the public. In the process, he seems to have learnt quite a few tricks of the press and how to keep manage them. He has said in many a TV interviews that the transition from bureaucrat to Governor happened on the ‘flight from Delhi to Mumbai’.

The main purpose of his book, as he describes, is to explain the thinking behind his policies and to demystify the Reserve Bank. Broadly, he desires to eradicate the misperception that all that RBI does is print currency notes.

The eighteenth floor of the RBI building on Mint Street can be as isolating as it can be powerful. Dr. Subarao appears to have maintained the firmness of his feet while navigating the turbulent atmosphere above. He has a great penchant for literature, culture, history and philosophy as he cites phrases and quotations from Hamlet, Gandhi, Satre, Mahabharata and Chinese sayings to name a few. Myriad anecdotes and interesting commentary make sure that the reader will never feel trapped in a soup of financial economics.


His book assumes even higher importance because of the recent controversies surrounding the reappointment of Dr. Raghuram Rajan, the present RBI Governor as Dr. Subbarao explains the situations surrounding his own extension and the ambiguity in the interpretation of the RBI Act by the executive.

It takes you from the North Block in Lutyens Delhi to the Mint Street in Mumbai, IMF-World Bank HQs in Washington DC, BIS in Basel and more. You almost get a seat to Dr. Subbarao’s meetings with then Finance Ministers of India P. Chidambaram and P. Mukherji, current RBI Governor Dr. Raghuram Rajan, then Chairman of US Federal Reserve Bank Ben Bernanke, then US Treasury Secretary Tim Geithner, a momentary exchange with the then US President G. W. Bush and much more.

“Who Moved My Interest Rate” is definitely an illustrious piece of literature about the Indian central bank and it profoundly succeeds in demystifying the RBI to the general public. There is, simply, no other piece of economic literature that shines light on the not-so-glamorous ‘behind the scenes’ working of the RBI that culminates into that prestigious and iconic signature under the trustworthy sentence – ‘ I promise to pay the bearer a sum of ___ Rupees”

Who knows, Dr. Rajan might follow suit?


2 thoughts on ““Thank God, The Reserve Bank Exists”

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