The Indian rupee as was largely expected dropped sharply in trade, after RBI Governor Raghuram Rajan said he would not be seeking a second term, when his term as RBI Governor expires in Sept 2016.

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There are worries that Rajan's exit could lead to loss of confidence by foreign investors in the equity and debt markets, who have been impressed by Rajan's tenure.

Though the RBI has enough and more reserves to intervene and stabilize the forex market, there could be some short term impact.

Most observers are now waiting to see, who would be the next RBI governor, though none would be able to fit the shoes of Raghuram Rajan according to them.

Though Rajan was seen as an inflation hawk, his desire to clean-up the banking system, and not cut interest rates in the wake of pressure, were a big positive for the country in the longer term.

One tweet on Raguram Rajan's sumer up the loss. "Like I said Raghuram Rajan is the Rahul Dravid of Indian economy: played balls on merit, showed good footwork & kept a steady temperament."

Meanwhile, the stock markets are also expected to open lower, though most of Asia is trading with gains.

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