It's 'extremely critical' for MPC to maintain credibility: Jayanth Varma

Central bank is risking making inflation entrenched with its easy money policy, says dissenting member of Monetary Policy Committee.

Jayanth R Varma was the lone one in the Reserve Bank of India’s six-member Monetary Policy Committee (RBI, MPC) who dissented with maintaining an accommodative stance in the August review of monetary policy. Varma is a professor at the Indian Institute of Management, Ahmedabad, as well. Varma told Business Standard why he believes the reverse repo needs to move up and the accommodative stance is not required now. Edited excerpts of an interview done over the telephone:

Do you believe that RBI has started the process of normalising the monetary policy as many market participants think? That is, a beginning