MACRO 4 minutes to read

The end of independence for the RBI?

Kay Van-Petersen

Global Macro Strategist, Saxo Bank Group

Summary:  What does a less-independent RBI mean for the rupee?


The resignation of Reserve Bank of India governor Urjit Patel, who left citing 'personal reasons' following repeated pressure from the Modi government, has many onlookers concerned about the RBI's independence.

According to Bloomberg, "with state elections in progress and federal elections due next year, Modi’s officials have been pressing the RBI to lighten up. They want the central bank to transfer some of its reserves to the government, to relieve pressure on the public finances. They have called for gentler treatment of bad loans and for other kinds of regulatory forbearance. And they’ve made it clear that they’d prefer a less hawkish approach to monetary policy."

These developments place the future of the INR in jeopardy; click here for Saxo Head of APAC Macro Strategy Kay Van-Petersen's latest thoughts on the INR charts under what appears to be a retreat of central bank independence in India.

Click here to watch Van Petersen's analysis of the situation on YouTube.
Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)