RBI Governor's tie and speech hints at policy tilt, says SBI in light-hearted report

Mint

5 hours ago

In an unconventional take on central bank signalling, a recent Business Standard report highlights how State Bank of India (SBI) analysts are decoding not just the RBI's policy language, but also Governor Sanjay Malhotra's tie colours, to assess monetary direction.
According to SBI's latest research note, The Monetary Multiverse, the use of the word 'growth' surged in the June 2025 monetary policy statement, appearing 24 times. This increased focus on growth, analysts say, preceded a 50-basis point rate cut, suggesting a potential shift in policy priorities.
SBI, however, noted that its analysis is 'to be taken on a lighter note'. Still, the frequency of words like 'growth' and 'inflation', visualised via word clouds, can reflect a central bank's tilt. A higher mention of 'growth', for instance, may signal a more accommodative stance.
The report also introduces 'Necktie Nomics': a data-backed (if playful) analysis linking the RBI Governor's tie colours to rate actions.
The report read, 'In this alternate universe, monetary policy doesn't just follow inflation or GDP, it follows the Governor's wardrobe. When repo decisions are made, it's not just models and mandates that matter, but the shade of silk around the RBI Governor's neck.' Warm (red, orange): Tied to a hawkish bias and more rate hikes
Tied to a hawkish bias and more rate hikes Cool (blue, aqua): Typically aligned with status quo decisions
Typically aligned with status quo decisions Dark (black, navy): Not linked to a specific direction, but often worn during decisive policy actions
Not linked to a specific direction, but often worn during decisive policy actions Mixed (purple, yellow): Associated with high policy unpredictability
SBI then created a Tie Volatility and Tilt Index (TVTI), which combines the likelihood of a rate action with its consistency across similar tone categories. The report notes that the dark tie worn by the Governor during the recent 50 bps rate cut fits the 'decisive action' theory.
The report notes that while such indicators are not intended to replace macroeconomic models, they provide an interesting, albeit unconventional, perspective on interpreting central bank behaviour.