Central banks playing with fire in growth push - Raghuram Rajan

NEW YORK (Reuters) - The "specter of deflation" is spurring the world's major central banks into a dangerous struggle for stronger domestic growth that imperils financial markets and ignores the needs of developing nations, the head of the Reserve Bank of India (RBI) said on Tuesday.

RBI Governor Raghuram Rajan, making a familiar argument for better global coordination on monetary policy, said central bankers in developed economies should bear in mind their international responsibilities.

"The current non-system in international monetary policy is, in my view, a source of substantial risk, both to sustainable growth as well as to the financial sector," Rajan told an audience of economists and investors in New York.

"I fear that in a world with weak aggregate demand, we may be engaged in a risky competition for a greater share of it," he added. "We are thereby also creating financial sector risks for when unconventional policies end."

(Reporting by Jonathan Spicer; Additional reporting by Suvashree Choudhury in Mumbai; Editing by Meredith Mazzilli)