This Article is From Dec 17, 2018

Centre's Pressure On RBI May Hurt India's Financial Stability: S&P Global

S&P's lead global sovereign analyst said last week country's 7% annual growth would be enough to keep country's investment grade BBB- rating stable.

Centre's Pressure On RBI May Hurt India's Financial Stability: S&P Global

S&P views as credit negative the circumstances leading to resignation of Urjit Patel, analysts said.

LONDON:

The increasing involvement of the government in the affairs of the country's central bank is a negative for the ratings of giant Asian economy's banking system, S&P Global said on Monday. "S&P Global Ratings views as credit negative the circumstances leading to the recent resignation of Urjit Patel, governor of the Reserve Bank of India (RBI)," S&P analysts Michael Puli and Andrew Wood said in a note.

"Sustained and intense external pressure from the Indian government risks eroding these (central bank independence and prudent policy) settings over time, and could also undermine the long-term financial stability in the country."

S&P's lead global sovereign analyst said last week that the country's 7 per cent annual growth would be enough to keep the country's investment grade BBB- rating stable.

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