Markets

Patel’s exit ups macro risks for India: Fitch

Global rating agency Fitch on Tuesday raised a red flag, saying Urjit Patel's shocking exit as RBI Governor is going to raise India's risk perception.

"RBI Governor resignation raises macroeconomic risks," ETNow reported quoting Fitch.

Patel stepped down on Monday following a month-long showdown over a host of policy matters with the government that put the central bank's autonomy in spotlight.

RBI has been under immense pressure to relax rules for some public banks high on NPAs to lend more freely and transfer some of its surplus capital to help bridge the fiscal deficit.

Top brokerages believe Patel's resignation will be sentimentally negative for markets.

Analysts are sanguine about the market for the long term despite Patels googly and the Assembly poll-induced volatility.

This school of thought is of the view that the impact could be short term and won't last beyond a point. “This (Patels resignation) is not likely to impact the economy and the market beyond the very short term, provided we get a reputed person as replacement,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. “The market is being impacted by the global selloff and domestic political concerns. Once these issues die down, the market will stabilise.”

Another Dalal Street veteran even went to the extent of saying capital markets need not worry too much as the outgoing governor was not credited with any path-breaking or innovative monetary tools or policies.

Original Article

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