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Urjit Patel a worthy replacement of Dr Rajan: Analysts

Most traders expect the Nifty to open higher on Monday, investors to welcome the new face

Policy Pulse
Publish Date: Aug 21 2016 2:24PM | Updated Date: Aug 21 2016 2:24PM

Urjit Patel a worthy replacement of Dr Rajan: Analysts

Urjit Patel's appointment as Reserve Bank Governor Raghuram Rajan's successor should lead to benefit in stock markets on Monday, say most of the analysts. Dr Patel, 52, has been a deputy governor at RBI since January 2013.

 

“He is the key architect of the inflation-targeting approach formalised as a policy recently and the Markets should react positively on Monday," said Jay Shankar, chief India economist & director of Religare Capital Markets, as reported in NDTV.

 

The rupee, which slipped below 67 per on Friday, is also expected to gain as Dr Patel will be viewed as a worthy replacement of Dr Rajan. DK Pant, chief economist with India Ratings said, "The market will welcome his appointment. Maybe you may also see bond yields responding." 

 

According to the experts, investors do not want sudden changes or surprises and Dr Patel's appointment will ensure that there will be no knee-jerk shift in RBI's policy.  "Great move. He's young and qualified. Above all, signals policy continuity. Markets should exhale." said Anand Mahindra, chairman of M&M. 

 

Like Dr Rajan, Urjit Patel is also viewed as a monetarist. His appointment will disappoint those who have argued in favour of a lower interest rate regime in the short term, but for equity markets his inflation-targeting policy augurs well for the long term.