Any attempt by govt to curtail central bank's independence credit negative: Moody's

In the backdrop of RBI Governor Urjit Patel's resignation, Moody's Investors Service Monday said the independence of a country's central bank is an important consideration while assessing a country's institutional strength and any attempt by the government to curtail it would be credit negative.

Patel Monday resigned from the post citing personal reasons. Patel, whose three-year term was to end in September 2019, is the first governor since 1990 to step down before his term ended.

To a query on the sovereign rating impact of the developments around RBI, Moody's said, "While the motivation for the RBI Governor's resignation is unclear, the independence of a country's central bank is an important consideration in our assessment of a sovereign's institutional strength."