Nifty99000 100%

Sensex99000 100%

Article rating: 4.1
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
Article rating: No rating
Tags:
Article rating: 4.7
Tags:
Article rating: 4.0
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
Article rating: No rating
Tags:
Article rating: 3.5
Tags:
Article rating: 4.2
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
RSS

News

‘RBI guv’s resignation to dampen sentiments’

Author: PTI/Wednesday, December 12, 2018/Categories: Regulatory

‘RBI guv’s resignation to dampen sentiments’

Singapore - The immediate resignation of Reserve Bank of India Governor Urjit Patel comes at a sensitive time, when negotiations with the government to iron out differences on key regulatory aspects are ongoing, the Singapore banking group, DBS, has said.

“Timing of the governor's resignation and the already-cautious mood in the markets following Monday's exit polls, to be followed by the actual count for the state elections, will dampen sentiments,” Radhika Rao, economist at DBS Bank said.

The bank further noted that the uncertainty surrounding the governor’s departure is likely to push 10-year INR yields back above 7.6 per cent in a knee-jerk sell-off, while, the Indian rupee is likely to weaken past 72/USD.

Beyond sentiments, markets will seek clarity on Patel's successor, with the likelihood that one of the current deputy governors might take over the mantle.

A search panel might be formed, with a former finance secretary and finance commission member, also reportedly in the running.

On policy, the RBI might soften its stance to adopt a more neutral-to-dovish approach as inflation continues to undershoot the 4 per cent target and growth rolls off its peak.

“Markets are likely to price in a shift to neutral stance as early as the February 2019 meeting, which the narrative increasingly swinging towards cuts if inflation stays below 4 per cent and global oil shows little signs of revival,” said DBS.

The bank further pointed out that deputy governor Acharya had suggested on December 5, that more Open Market Operations (OMOs) are likely in the March 2019 quarter. Another INR 800 - 1 trillion tranche in January-March 2019, could take this year's cumulative OMOs to INR 2.5 to 3 trillion, it said.

Shades of dovish underpinnings in the RBI guidance is likely to drive 2-year bond yields yet lower towards 7 per cent, believes DBS.

Meanwhile, Singapore-based financial analysts said the sudden resignation of a financial stalwart such as Patel affects investors' confidence in the country.

“This is shocking. Why he has to resign this week, ahead of the RBI meeting,” said a financial market analyst focused on India.

Financially, India remains a stable economy with bright outlook.

But politically, there is a deep concern about prospects as a large scale development is underway in the country which seeks global investments, said the financial market observers.

Print Rate this article:
No rating

Number of views (394)/Comments (0)

rajyashree guha

PTI

Other posts by PTI
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free