Of 'boring' monetary policy & witty money men

Beyond growth-inflation dynamics, let's revisit moments when central bankers brought humour to the table

- Tamal Bandyopadhyay

Everybody and her aunt are speculating about yet another rate cut by the Reserve Bank of India (RBI) this week, when its rate-setting body—the Monetary Policy Committee (MPC)—meets.

In the past two MPC meetings, the RBI had cut the policy repo rate by a quarter percentage point each, paring it from 6.5 per cent to 6 per cent. In April, it also changed the stance to "accommodative," officially kicking off the easy money cycle.

Retail inflation of 3.16 per cent in April, the lowest in 60 months, slow credit growth, and a stable rupee, among other factors, point to the possibility of yet another rate cut.

Typically, a pre-policy column discusses inflation, growth, and everything else related to the policy. This time round, let's focus on something else.

After presenting his first monetary policy in February, RBI Governor Sanjay Malhotra faced this question from the media: "You mentioned the flexible inflation targeting and, at the same time, your original target is 4 per cent for the medium term. Just wondering, will you be comfortable if inflation remains within the 2-6 per cent range or will you want to see inflation durably settling around 4 per cent?"

Malhotra, a 1990 batch IAS officer, replied with a straight face: "When you go to an exam where the maximum marks are 100 and passing marks 40, what do you aspire for? Do you aspire to pass or do you aspire to do extremely well? Well, some may like to just pass. At the RBI, we like to be on top of everything."

In April, when asked if more rate cuts were in the offing, Malhotra said, "I am Sanjay, not Sanjaya of the Mahabharata, who can predict future rate actions."