Curtailing central bank's independence will be credit negative: Moody's

Urjit Patel, whose three-year term was to end in September 2019, is the first governor since 1990 to step down before his term at the RBI ended.

A central bank’s independence is an important consideration in assessing a country's institutional strength and any attempt to curtail would be credit negative, said Moody's Investors Service after Reserve Bank of India (RBI) governor Urjit Patel resigned on Monday.

Patel, whose three-year term was to end in September 2019, is the first governor since 1990 to step down before his term ended.

"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," said Moody's in response to question about the RBI.

It said that