Insider Urjit Patel was named on Saturday as the next governor of the Reserve Bank of India for a three-year term, succeeding Raghuram Rajan who dropped a bombshell in June by announcing he did not want to stay on.
Patel, 52, is currently a deputy governor and headed a committee on monetary policy reforms whose recommendations to set a inflation and create a new Monetary Policy Committee were backed by Prime Minister Narendra Modi's government.
Here are comments from analysts and officials on Patel's appointment.
RUPA REGE NITSURE, GROUP CHIEF ECONOMIST, L&T FINANCE HOLDINGS
"Dr. Patel's appointment as the RBI Governor would give a sense of policy continuity. It will assure international investors that the flexible inflation targetting framework will be taken to its logical end and it's absolutely essential for India's monetary policy credibility."
AJAY BODKE, CEO & CHIEF PORTFOLIO MANAGER, PMS PRABHUDAS LILLADHER
"Institutional investors both domestic and foreign would welcome the Indian government's appointment of RBI Deputy Governor Dr. Urjit Patel as successor to Dr. Raghuram Rajan.
"It signals a seamless continuity in the policies pursued by the RBI to conduct its monetary policy in an independent manner.
"One of the most seminal achievements of Dr. Rajan was the signing of a monetary policy agreement between the government and RBI for 'flexible inflation targeting', which was based on the report of the panel headed by Dr. Patel.
"Dr. Patel's path-breaking report has helped India join the league of developed nations where adoption of flexible inflation targeting has helped anchor inflationary expectations and brought about a structural control over inflation. Markets would strongly cheer the appointment"
ANEESH SRIVASTAVA, CIO, IDBI FEDERAL
"There were few factors we were looking at when it comes to new Governor's appointment. They are: monetary policy framework, inflation target range, systemic liquidity and continuation of existing policies. The choice of Urjit Patel ensures all these factors are taken care of.
"Being the man who has seen RBI's policies and framework, we can expect continuation of what we saw from Rajan.
"Do we need a dovish governor who could be good for short term, or do we need someone who could ensure long term sustainability of policies which have been framed and in place now? I think the latter makes sense and Urjit Patel fits the bill here."
DEVENDRA KUMAR PANT, CHIEF ECONOMIST, INDIA RATINGS & RESEARCH
"Continuation in monetary policy will remain. He is the architect of inflation targeting approach. Investors don't want any change in policy direction.
"He has worked with IMF, he has worked with the corporate sector and he was with the Brookings Institution. So, coming from different areas, he knows how things are and what kind of action is required.
"The market will welcome it (his appointment). Maybe you will see a strengthening of rupee vis-à-vis dollar if globally there is no turmoil. You may also see bond yields responding."
ANANTH NARAYAN, REGIONAL HEAD OF FINANCIAL MARKETS, ASEAN AND SOUTH ASIA, STANDARD CHARTERED BANK, MUMBAI
"It's good to have the uncertainty and suspense out of the way; we can focus on the way forward now. Given the monetary policy framework was envisaged by the eponymous Dr. Urjit Patel committee, there should be continuity in this critical aspect. To that extent, global investors and other stakeholders will welcome this appointment.
RITIKA MANKAR, ECONOMIST, AMBIT CAPITAL, MUMBAI
"Choice of Urjit Patel is in line with our expectations as he was one among the top two candidates we were working with.
"What we like about him is: One, he's seen RBI change from being a loosely inflation-focused central bank to one that formally targets CPI inflation.
"And second, his experience as a deputy governor in charge of monetary policy under the governorship of Rajan will hold him in good stead. However, what remains to be seen is how he handles banking as a sector, he probably lacks what a candidate like (SBI Chair) Arundhati Bhattacharya, would have brought to the table."
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