Reuters :
India’s government named Shaktikanta Das, a seasoned financial bureaucrat, as the next governor of the Reserve Bank of India (RBI), replacing Urjit Patel, whose abrupt resignation on Monday roiled financial markets.
Das, who retired as the secretary of department of economic affairs, has been appointed as the central bank’s governor for a three-year term, the government said in a statement on Tuesday.
Das is known as an experienced bureaucrat who has held key positions both under the ruling Bharatiya Janata Party as well the previous Indian National Congress-led government.
His appointment is likely to cheer markets as investors expect communication between the government and the central bank to improve following a public spat that deepened an existing rift between the two sides.
“Bonds and rupee should react positively following this news,” said Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai.
“He is a bureaucrat and will help in improving the RBI-government relationship. We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead, given that inflation has come off sharply.”
On Monday, Patel’s resignation came after over a month-long tussle over policy with the government that raised concerns about the central bank’s independence.
Government officials had been pressuring the RBI to allow some bad-debt-laden public sector banks to lend more easily, and had pushed for it to hand over some of its surplus reserves to help fund the fiscal deficit.
India’s government named Shaktikanta Das, a seasoned financial bureaucrat, as the next governor of the Reserve Bank of India (RBI), replacing Urjit Patel, whose abrupt resignation on Monday roiled financial markets.
Das, who retired as the secretary of department of economic affairs, has been appointed as the central bank’s governor for a three-year term, the government said in a statement on Tuesday.
Das is known as an experienced bureaucrat who has held key positions both under the ruling Bharatiya Janata Party as well the previous Indian National Congress-led government.
His appointment is likely to cheer markets as investors expect communication between the government and the central bank to improve following a public spat that deepened an existing rift between the two sides.
“Bonds and rupee should react positively following this news,” said Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai.
“He is a bureaucrat and will help in improving the RBI-government relationship. We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead, given that inflation has come off sharply.”
On Monday, Patel’s resignation came after over a month-long tussle over policy with the government that raised concerns about the central bank’s independence.
Government officials had been pressuring the RBI to allow some bad-debt-laden public sector banks to lend more easily, and had pushed for it to hand over some of its surplus reserves to help fund the fiscal deficit.
