Reserve Bank Governor- designate Raghuram G Rajan said on Thursday he is confident of overcoming challenges facing the economy and the rupee.

“It is a challenging environment and we will overcome the challenges,” Mr Rajan told reporters after a meeting of the RBI’s central board here.

Mr Rajan’s appointment as the 23rd Governor comes amid unprecedented macro economic challenges, most visible in the rupee, which has lost over 12 per cent since the beginning of the fiscal. Amid external sector risks, the domestic economy faces a widening current account deficit, high consumer price inflation and slowing growth.

“I look forward to working with everybody at the Reserve Bank. It’s a great institution and I am looking forward to it,” said Mr Rajan, who will join the central bank as an officer on special duty before taking over on September 5.

The RBI’s recent measures aimed at squeezing liquidity to curb speculation in the forex market have aggravated fears that lending rates could be raised, choking economic growth.

After his appointment was announced on Tuesday, Mr Rajan had said he does not possess a “magic wand” that will take care of all economic woes.

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