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Opinion | Bird Watching at the Reserve Bank of India

We explore the minutes of the last Monetary Policy Committee meeting to decipher the ornithological profiles of the members.

December 20, 2018 / 01:57 PM IST

Members of the Reserve Bank of India’s Monetary Policy Committee are used to being classified as hawks or doves. But this is doing them, as well as the birds, an injustice. Surely their many-splendoured personalities cannot be limited to being mere hawks and doves? Former RBI governor Raghuram Rajan had expanded the range of bird tags by claiming the RBI top brass consisted of owls. "We are neither hawks nor doves, we are actually owls," he had insisted. Whether as wise as an owl or as blind as an owl is open to question. Be that as it may, we build on that deep insight and explore the minutes of the last Monetary Policy Committee meeting to decipher the ornithological profiles of the members.

Let’s start with Urjit Patel, the former governor, who left the RBI like a bat out of hell. A bat, though, is not a bird. This meeting was his swan song, which I suppose makes him a swan, though a rather unlikely one. Some have said a goose would be more appropriate because his goose was cooked, but the flaw in that reasoning is he wasn’t cooked but his goose was, although there’s some difference of opinion on that. The government, of course, has no doubt whatsoever that he was an albatross around its neck.

Ravindra Dholakia has been classified as a dove ever since we started giving them bird names and there’s no reason to change it now. I would merely like to emphasise he isn’t a turtle dove, since he doesn’t bill and coo, at least not in monetary policy meetings. The latest meeting however does open up the possibility of him being a wet hen since he ranted that ‘retaining the stance of calibrated tightening seems totally inconsistent and unjustified.’ He seems as mad as a wet hen against the decision to keep interest rates high.

There can be absolutely no doubt that Chetan Ghate is an owl. Only someone as wise as an owl could say ‘two interlaced variables pose the potential of un-anchoring inflationary expectations, and thereby making it difficult to ensure price stability on an enduring basis’ without batting an eyelid at the monetary policy meeting.

Some say Pami Dua is neither fish nor fowl, more of a dark horse really. But she might be a turkey, on the rather slender basis that she talks turkey. Thankfully, she survived the Thanksgiving cull.


What about Michael Patra? He’s traditionally been known as a hawk, although his enemies who want lower interest rates say he’s a loon, no doubt inspired by the ‘crazy as a loon’ idiom. But we don’t have loons in India. His statement at the monetary policy meet that it was ‘apposite to persevere with the stance of calibrated tightening to head off inflation pressures from potentially corroding the foundations of the growth path that is evolving over the medium-term’ may or may not make him as graceful as a swan, but there’s no doubt he’s in fine feather. A swan? Nah, not really, those are borrowed plumes, you can’t hide the hawk in him.

We come then to Viral Acharya. In the last monetary policy meeting, his eagle eye spotted a ‘divergence in the direction of price movements in data in key food items provided by the Department of Consumer Affairs (DCA) and realised food inflation for October.’ Such divergence, he said, is rarely observed. That firmly makes him an eagle.

Others say his famous speech on the independence of the RBI that so rattled the government was the canary in the coal mine. That makes him a canary, but it’s not known whether he sings like one at monetary policy meetings. Others believe that, given what the government thinks of him, he is most likely a sitting duck. On the other hand, the whole controversy may well be water off a duck’s back. Either way, he’ll be a duck.

Everyone is agog to know what Shaktikanta Das, the new RBI governor and chairman of the MPC, will be. But there is little doubt he’ll be cock of the walk, besides being happy as a lark.

Lastly, just in case anybody thought otherwise, this is of course a cock-and-bull story.
Manas Chakravarty
Tags: #Economy #RBI
first published: Dec 20, 2018 01:52 pm

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