New Delhi, Oct. 5 -- It all starts with some signalling, achieved largely through adjustment of liquidity and recalibration of benchmark rates as well as yield curves. Then comes nuanced communication, imploring economic agents to read between the lines, with the hope that this will help mould market expectations.

In the final stage, there is active perception-building with pointed communication-both verbal and printed-to push economic activity along a chosen pathway. This is how many central banks usually try to shift strategy, hoping to nudge borrowers and lenders to act in a certain way. The Reserve Bank of India (RBI) has now added controlled but explicit gesturing to the array of communication tools at its disposal.

The monetary po...