India central bank governor could resign soon

Reserve Bank of India Governor Urjit Patel was claimed to be tired of the struggle with the government, thus provoking his reported resignation. (Reuters)
Updated 07 November 2018

India central bank governor could resign soon

  • The Indian government and the central bank have been fighting for weeks over how much autonomy the RBI should have

NEW DELHI: Reserve Bank of India (RBI) Governor Urjit Patel could resign at the central bank’s next board meeting on November 19, online financial publication Moneylife reported on Wednesday, citing sources in touch with the governor.
The Indian government and the central bank have been fighting for weeks over how much autonomy the RBI should have as the administration of Prime Minister Narendra Modi seeks to reduce curbs on lending and to gain access to the RBI’s surplus reserves.
The rift worsened late last month when one of the bank’s deputy governors said in a speech that undermining central bank independence could be “potentially catastrophic”.
Moneylife’s report said if the feud escalates further, there is “a good chance” Patel will resign at the RBI’s next meeting, saying he was tired of the struggle with the government, and it was having a negative impact on his health.
The report did not cite the number of sources. The RBI did not immediately respond to a request for comment.
The story was written by veteran Indian financial journalist Sucheta Dalal who is well known for her investigative reporting. She is one of the founders of Moneylife.
Reuters reported on Tuesday that the government intends to keep pressing its demands even if it risks provoking a resignation by Patel, according to three sources familiar with the government’s thinking.


Saudi Arabia expects to reduce spending as it seeks to shrink deficit

Updated 42 min 16 sec ago

Saudi Arabia expects to reduce spending as it seeks to shrink deficit

 

LONDON: Saudi Arabia plans to reduce spending next year by about 7.5 percent to SR990 billion ($263.9 billion) as the Kingdom seeks to reduce its deficit. It compares to spending of SR1.07 trillion this year it said in a preliminary budget statement.
It anticipates a budget deficit of about 12 percent this year falling to 5.1 percent next year.
The Kingdom released data on Wednesday showing that the economy contracted by about 7 percent in the second quarter as regional economies faced the twin blow of the coronavirus pandemic and continued oil price weakness.
The unemployment rate among Saudis increased to 15.4 percent in the second-quarter compared to 11.8 percent in the first quarter of the year.
The challenging headwinds facing regional economies is expected to spur activity across debt markets as countries sell bonds to help fund spending.
Saudi Arabia has already issued about SR84 billion in sukuk year to date.
“Over the past three years, the government has developed (from scratch) a well-functioning and increasingly deeper domestic sukuk market that has allowed it to tap into growing domestic and international demand for Shariah-compliant fixed income assets,” Moody’s said in a statement on Wednesday. “This, in turn, has helped diversify its funding sources compared to what was available during the oil price shock of 2015-16 and ease liquidity pressures amid a more than doubling of government financing needs this year.”