Reserve Bank of India Governor Says Will Step Down in September

The popular governor of the Reserve Bank of India, Raghuram Rajan, will step down when his term ends in September, he wrote in a letter to colleagues published on the central bank's website Saturday.

"On due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016.

"I will, of course, always be available to serve my country when needed," Rajan wrote.

Speculation has been rife in the Indian media about whether the former IMF chief economist would seek a second term as RBI head.

In the letter, Rajan considered his achievements as governor, including bringing down the inflation rate and tackling India's mountain of bad loans, and thanked colleagues for their "unflinching support".

"I am an academic and I have always made it clear that my ultimate home is in the realm of ideas," the former University of Chicago professor wrote.

Rajan, who famously predicted the 2008 global financial crisis, has been widely credited with bringing stability to India's economy since his appointment as RBI governor in September 2013.

But he has clashed with Prime Minister Narendra Modi's Hindu nationalist government over how quickly the central bank should cut rates.

Rajan has slashed interest rates over the past 18 months to their lowest level since early 2011 -- but the ruling Bharatiya Janata Party wanted deeper cuts to boost economic growth further.

He's also faced personal attacks from right-wing MPs from the BJP.

Rajan has successfully taken aim at inflation -- bringing it down from double-digit levels to over five percent currently -- and has been credited for creating a stable environment for the economy to grow.

India's economy expanded by 7.9 percent in the fourth quarter of 2015-16, the fastest of any major economy.

In a sign of his popularity, tens of thousands of people signed an online petition calling for him to be given a second term.