The government reappointed Urjit Patel as a Reserve Bank of India (RBI) Deputy Governor.
The new mandate, for a three-year term, had been expected and marks a vote of confidence in Governor Raghuram Rajan’s efforts to overhaul how the RBI sets interest rates.
Mr Patel has run the monetary policy department since 2013 as one of the RBI’s four deputy governors.
His reappointment also raises investors’ hopes that Mr Rajan will also be offered an extension of his own when his tenure ends in September.
Mr Patel’s three-year tenure was due to end next week. He will be reappointed with effect from January 11.
Mr Patel headed the committee that introduced landmark changes including a switch to inflation targeting and adopting consumer prices as the new barometer rather than wholesale prices.
The changes are considered among the most significant since India opened its economy in 1991.
Mr Rajan, an academic and former chief economist at the International Monetary Fund (IMF), is considered one of the most influential governors in the RBI’s 81-year old history, building a significant profile abroad as a voice for emerging markets.
He was appointed by the previous UPA government, but has established a good working relationship with Prime Minister Narendra Modi’s administration, despite occasional disagreements over policy and the shape of some reforms.