Raghuram Rajan's exit from the Reserve Bank of India (RBI), the country's central bank, may not be great news for investors bullish on the Indian economy.
Emerging market fund managers and global analysts have warned that the exit could mean a long term era of uncertainty and markets don't like that. Indian indexes slipped into negative territory on the news Monday with the rupee falling to a near one-month low at 67.4 against the dollar.
The so-called "rockstar" central banker, as he is referred to by the international investor community, announced on Saturday that he would not seek a second term after September and would return to academia instead.
Analysts have suggested that his departure could lead to massive outflows. India has enjoyed an investor-friendly status in the past couple of years that has led to a number of U.K. and U.S. fund managers to include India in their portfolio. But the uncertainty surrounding the appointment of a new governor has roiled markets.