Bond Bulls Have Most at Stake as India Gets New Central Banker
- Rupee, bonds done better under Rajan than two prior RBI heads
- Bank stocks have outpaced gains in Sensex in past three years
Urjit Patel to Take Over for Rajan at RBI
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As Urjit Patel prepares to take charge at India’s central bank, investors in the nation’s rupee and bond markets have the most at stake.
That’s because current Governor Raghuram Rajan’s term, which ends Sept. 4, has so far brought them the best pay offs when compared with his two predecessors. Total returns from investing in the rupee outpaced every emerging-market peer other than the Argentine peso. Patel’s reputation as an inflation hawk -- and recent data, which showed consumer price gains had breached the central bank’s upper bound of 6 percent -- may stand the currency in good stead, even as it raises questions about the sustainability of this year’s bond rally.