RBI monetary policy trapped in ‘chalk and cheese’ problem: SBI report
The recent RBI monetary policy minutes, monetary policy press statement and RBI Governor Sanjay Malhotra’s statement for August, and even earlier months, reveal the conundrum of “chalk and cheese” in monetary policy, an SBI Research report said on Monday.
There were clear yet divergent signals from these three statements despite originating from the same institution/source, said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India. “This is precisely the communication puzzle emerging from the RBI’s latest policy cycle: the latest MPC minutes appear more hawkish, keeping inflation risks and the possibility of further tightening in focus while the Governor’s statement sound considerably more patient and data-dependent,” Dr Ghosh argued.
In fact, the divergence is particularly pronounced in “policy and rates” and “inflation and prices”, suggesting that the minutes attach greater weight to the risks most relevant for the future rate trajectory, whereas the RBI Governor’s communication tends to attenuate these concerns and give relatively greater weight to growth and financial conditions.
“As a matter of fact, in terms of macro tones, if the Governor statement is indexed to 1, the MPC minutes statement is at 1.76 in June 2026 and it rises further to 1.82 in August 2026. A higher number relative to 1 indicates more hawkishness,” according to Dr Ghosh. The SBI report further argued that the policy dilemma for markets is, therefore, increasingly a “chalk or cheese” problem
There were clear yet divergent signals from these three statements despite originating from the same institution/source, said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India. “This is precisely the communication puzzle emerging from the RBI’s latest policy cycle: the latest MPC minutes appear more hawkish, keeping inflation risks and the possibility of further tightening in focus while the Governor’s statement sound considerably more patient and data-dependent,” Dr Ghosh argued.
In fact, the divergence is particularly pronounced in “policy and rates” and “inflation and prices”, suggesting that the minutes attach greater weight to the risks most relevant for the future rate trajectory, whereas the RBI Governor’s communication tends to attenuate these concerns and give relatively greater weight to growth and financial conditions.
“As a matter of fact, in terms of macro tones, if the Governor statement is indexed to 1, the MPC minutes statement is at 1.76 in June 2026 and it rises further to 1.82 in August 2026. A higher number relative to 1 indicates more hawkishness,” according to Dr Ghosh. The SBI report further argued that the policy dilemma for markets is, therefore, increasingly a “chalk or cheese” problem