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.
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.
{{/usCountry}}According to the analysis, warm tones were slightly hawkish – more likely to appear during rate hikes.
{{/usCountry}}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.