Tale of Two Patels On Day India’s Rift With RBI Played Out

(Bloomberg) -- As markets sought clues on whether differences between India’s government and Urjit Patel-led Reserve Bank of India had reached a flash point, government officials were paying homage to another Patel.

India on Wednesday unveiled the world’s tallest statue in a tribute to Vallabhbhai Patel, the nation’s first home minister credited with integrating various provinces with India after independence in 1947. The 182-meter ‘Statue of Unity’ was unveiled by Prime Minister Narendra Modi on the banks of the Narmada river in the state of Gujarat.

In New Delhi, Finance Secretary Hasmukh Adhia administered the ‘national unity day’ pledge to government employees, commemorating the birth anniversary of the deceased leader, even as tension mounted about the finance ministry’s position on autonomy to the central bank -- an issue flagged by Deputy Governor Viral Acharya in a speech Friday. Acharya said his speech was inspired by Governor Patel’s encouragement to explore the theme of central bank independence.

Markets remained on edge even as an official indicated that the government would issue a statement on the matter. The finance ministry later clarified that the autonomy of the central bank is an essential and accepted government requirement. The rupee pared some losses after the announcement.

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