Owl to hawkish: RBI's journey under Urjit Patel

Reserve Bank of India Governor Urjit Patel, known for calling the central bank an “owl”, may have turned hawkish on its monetary policy stance towards the year end.

The bird analogy is an economist jargon given to central banks for being dove-like or hawk-like with respect to their softer and harder interest rate stance, respectively.

However, it was in response to a question raised in January 2014 whether the RBI is hawkish or dovish, that Patel, then Deputy Governor, said, “We are neither hawks, nor doves. We are owls. The owl is traditionally a symbol of wisdom. We are vigilant when others are resting. Don't try and put us into buckets. We are doing what is necessary for the economy.”

On Thursday, Patel, in an interview to Moneycontrol and CNBC-TV18, articulated the reasons for a clear shift from an ‘accommodative’ to a ‘neutral’ policy stance as was seen by the monetary policy committee (MPC).

On February 8, the MPC maintained a status quo on key policy repo rate at 6.25 percent to “assess how the transitory effects of demonetisation on inflation and the output gap play out”.

Repo rate is the rate at which RBI lends to banks.