Indian Rupee and Markets up as New RBI Gov. Rajan boosts confidence

Indian currency and stocks have jumped a day after the country's new RBI  chief took charge and promised tough action to boost growth.

Indian rupee, one of the world's worst performers this year, rose 2.3% against the USD.

India's main stock index, the Sensex, rose 2.3% in early trade on Today.

On Wednesday, Raghuram Rajan unveiled a series of measures aimed at propping up the currency and liberalising the country's banking sector.

Tough decision

One of the biggest issues facing the Indian economy has been the sharp decline in the rupee.

The fact that he has come with such pointed steps in mind shows that we will see more concrete steps very soon”

The Indian currency has dipped nearly 20% against the US dollar since May, as FII pulled out money from the country.

The pull-out has been triggered by a range of factors, including slowing economic growth and a lack of key reforms. At the same time, a recovery in the US economy has also made India a less attractive option for investors.

RBI has taken some steps to try to maintain the rupee's value and also shore up confidence in the economy.

However, The measures, which include increasing duty on gold, imposing capital controls and raising short-term interest rates, have failed to have any significant impact.

When NEW RBI  took charge, Mr Rajan announced that some of the actions that he would take to tackle the issue "will not be popular".

"The governorship of the central bank is not meant to win one votes or Facebook 'likes'. But I hope to do the right thing, no matter what the criticism, even while looking to learn from the criticism," he said.

His statement has helped to restore confidence.