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ETF Insights: Japan's PM Resigns, India Appoints New Finance Minister

by: Carl T. Delfeld September 03, 2008 | about stocks: EWJ / INP    
Carl T. Delfeld

Carl T. Delfeld

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The markets Wednesday welcomed a change in India's top central banker while lamented another unexpected change in Japan's premiership.

Mr. Yasuo Fukuda, Japan’s (EWJ) prime minister, on Monday night shocked even his own party by abruptly resigning after less than a year in office, paving the way for possible snap elections in the world’s second-largest economy which is facing a sharp slowdown in its growth.

He is the second prime minister to quit in a year, said he had resigned in the hope that a new leader could break the political deadlock that had plagued his term in office. The opposition Democratic Party of Japan has blocked legislation needed to invigorate Japan’s sinking economy and further its global diplomatic and security ambitions.

Meanwhile, India ETFs (INP) welcomed the Monday appointment of the finance ministry’s top bureaucrat, Duwuri Subbarao, as new governor of the country’s central bank, a surprise choice that comes as the country confronts high inflation and slowing growth.

Mr. Subbarao, the 59-year-old finance secretary, replaces Yaga Venugopal Reddy, a veteran Reserve Bank of India official whose term ended last week. This change is primarily due to political manuevering since the government has been pursuing populist policies ahead of next year’s election. Mr Subbarao is regarded as a safe choice as a career mandarin.

The Financial Times reports that India’s economy is going through one of its toughest periods in the past five years with inflation hitting a 13-year high of more than 12% and growth slowing to 7.9%, the lowest level in more than three years.

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This article has 3 comments:

  •  
    Sep 03 09:04 PM
    Misleading headline - it should say - "new governor of the country’s central bank" rather than Finance Minister who continues to be Mr. P Chidambaram
    Reply
  •  
    Sep 04 08:04 AM
    The article's titile "ETF Insights: Japan's PM Resigns, India Appoints New Finance Minister" is misleading...India has not appointed a new Finance Minister. A new governor of the country’s central bank has been appointed. Please corect the mistake...
    Reply
  •  
    Sep 05 02:27 PM
    The new RBI governor Mr. Subbarao has been part of the Indian Finance Ministry Department and is known to be close to Finance Minister P. Chidambaram. The RBI governor is like the FED Chairman for India.
    The recent rate increases to stifle Inflation and reduce liquidity from the markets have not been enough to rein in prices, Inflation still is at approx 12%. The comfort level for Inflation by end of 31st March 2009 is 7% and to hit this, RBI will continue to increase rates, Banks will have to increase reserves. borrowing rates will go up. This will affect Banks Stocks, Real Estate and Auto sector primarily
    Reply
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