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RBI credibility at risk, says lone dissenter on monetary policy panel

'The time to ditch the Covid stuff from the monetary policy has come,' says Jayanth Rama Varma.

RBI, Reserve Bank of India
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Ruchi Bhatia and Anup Roy | Bloomberg
The lone dissenter among India’s monetary policy setters sees the central bank’s inflation-targeting credibility at risk by keeping policy loose for too long and focusing on the impacts of the pandemic.
 
“Keeping an accommodative stance for too long risks high interest rates in future,” Jayanth Rama Varma, a member of the committee that decides on the Reserve Bank of India’s key policy rates, said in an interview this week. “To maintain its credibility, the central bank might have to do more later than it had to if it had acted early.”

The RBI, led by Governor Shaktikanta Das, has sustained

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