Liquidity overhang should not pose a risk to inflation: Ashima Goyal

For food price shocks supply-side measures are more effective. The government has long experience with intervention in the food economy, Goyal opines

Ashima Goyal, a member of the Reserve Bank of India’s (RBI’s) monetary policy committee (MPC), told Manojit Saha in an email interview that the committee should ensure that the real policy rates are positive in terms of inflation forecast. 

In the MPC minutes you have said: “Headline inflation forecasts have risen in the short term but remain slightly above 5 per cent for the next year, so a repo rate of 6.5 per cent still gives a positive real rate of around unity. This is the apt real rate given uncertainties in both growth and inflation.” Does that mean the