Latest news with #TheMonetaryMultiverse
Hindustan Times
6 days ago
- Business
- Hindustan Times
Can the RBI governor's tie colour predict rate moves? What SBI report says
In an alternate monetary universe imagined by SBI Research, the colour of the necktie around the RBI governor's neck might speak louder than spreadsheets. In a recent report titled The Monetary Multiverse, SBI Research has published a playful exploration of whether the colour of the Reserve Bank of India (RBI) Governor's necktie can hint at upcoming monetary policy decisions. Necktie Nomics: How tie colours could affect monetary policy(SBI) SBI Research warned that everything in the report should be taken 'on a lighter note'. 'Imagine a world where interest rates aren't determined by models, mandates or macroeconomic indicators—but by midnight tweets, personal equations and possibly necktie colours,' reads the opening sentence of the report, which then goes on to explore how certain words in the governor's speeches could indicate a policy shift, and how the colour of his necktie could affect repo rates. Necktie Nomics While firmly tongue-in-cheek, the report draws on psychological theory and past policy announcements to examine whether there could be a pattern between necktie tones and interest rate actions. The section titled 'Necktie Nomics: When Fashion Meets Fiscal Signals' breaks down tie colours worn by the RBI governor into four tone categories: Warm (reds, peach, orange), Cool (blues, aqua), Dark (black, navy), and Mixed (purple, yellow). What colours could mean According to the analysis, warm tones were slightly hawkish – more likely to appear during rate hikes. Cool tones were associated with neutral stances, often preceding no change in the repo rate. Dark colours seemed to signal decisiveness, showing up during significant moves like the recent 50-basis-point cut. Mixed tones, finally, were deemed the least predictable, with the highest variation in outcomes. The SBI Research team then introduced Tie Volatility and Tilt Index (TVTI). This metric blends a tone's average policy direction with how consistently it points that way. A high score suggests the colour sends a strong and reliable signal. For example, red and coral ties leaned hawkish, while light blues consistently mapped to periods of no change. The report acknowledges its own light-hearted nature, noting that these findings should be 'taken with a pinch of sugar.' However, it did note that 'in the uncertainties besieged world, Dark looks more associated with decisiveness as it clearly happened in the recent jumbo rate cut of 50 bps' – referring to the dark-coloured tie that Governor Sanjay Malhotra while announcing a surprise 50 bps rate cut last month.
Mint
6 days ago
- Business
- Mint
RBI Governor's tie and speech hints at policy tilt, says SBI in light-hearted report
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.
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Business Standard
7 days ago
- Business
- Business Standard
'Growth' mentions, tie colours may signal rate moves, says SBI report
SBI explores correlations between policy language and RBI Governor's tie colours, suggesting subtle textual and visual cues may foreshadow monetary policy changes Mumbai Listen to This Article A shift in the vocabulary of the Governor's speech may reflect a realignment in the central bank's policy priorities, according to a report by the State Bank of India (SBI) titled The Monetary Multiverse. The report stated that the word 'growth' was mentioned 24 times in the June 2025 policy statement. This change in language was followed by a 50 basis point policy rate cut. According to the report, such patterns in word frequency can serve as early indicators of a changing monetary policy stance. It added that when terms like 'growth' become more prominent than 'inflation', it typically suggests
