"We always like to see a central bank that is independent," Mr Sifon-Arevalo said.LONDON: India's rapid economic growth will be enough to offset worries about the independence of its central bank and keep its credit rating in the coveted investment grade bracket, SP Global said on Wednesday.
The country's BBB- rating puts it on the bottom rung of the investment grade ladder, and sentiment towards it was hit on Monday when central bank governor Urjit Patel resigned following a months-long tussle over policy with the government.
"We always like to see a central bank that is independent because if you don't, it can have very negative consequences on your capacity to contain inflation and foster growth," SP's lead global sovereign analyst Roberto Sifon-Arevalo told Reuters."But when you are growing at 7 per cent, that environment is quite forgiving, because it allows for a lot of these unorthodox things to happen without having a tremendous amount of damage."There are other pressures mounting too though.Prime Minister Narendra Modi's support has taken a hit ahead of national elections next year, volatile crude prices are tough for a country that imports over 90 percent of its oil, and there is general pressure on emerging markets amid a rumbling global trade war.(: Will Uphold Autonomy, Values, Says New RBI Governor Shaktikanta Das)"At the moment that (the high growth) is enough (to keep the rating stable)," Sifon-Arevalo added.
"If the economy was growing at 2 per cent it would be a lot more complicated."