India may need some durable liquidity infusion: MPC member Ashima Goyal

In a Q&A, she says the majority opinion is that the country has handled the turbulence well and can do so again, though the probability is low in the immediate future

Given that the Reserve Bank of India’s short-term liquidity management facility faces difficulties handling large external shocks, some injections of durable liquidity may be required for credit growth to be adequately supported, Ashima Goyal, a member of the Monetary Policy Committee told Bhaskar Dutta in an exclusive interaction. Edited excerpts:

You mentioned that the current level of the repo rate is a satisfactory focal rate. Are you convinced of a durable fall in inflation, given that the MPC projects a rise in the second quarter of the next year?

A: There is large uncertainty around inflation forecasts. On the whole,