RBI's Communication Style Shapes Professional Forecasts, Influencing Inflation Expectations.
The Reserve Bank of India's communications significantly impact professional forecasters' inflation expectations. Quantitative communications, like inflation projections, have a strong influence, especially for short-term forecasts under flexible inflation targeting. Factors like past inflation and Repo rate also affect forecasts. The choice of words in RBI statements became more impactful after the monetary policy committee took over in October 2016.