India's real rate shouldn't be more than 1%: MPC member Ashima Goyal

In a Q&A, she says interest differential with the US does not matter so much because India has caps on interest sensitive inflows. Overseas investment is a very low share of the country's debt market

At a time when the Reserve Bank of India is facing the challenge of reining in high inflation without hurting a nascent growth recovery, MPC member Ashima Goyal said in an interview to Bhaskar Dutta that the country’s real interest rate should not exceed one per cent. Going by the MPC’s inflation projections, this implies little room for further rate hikes in the current tightening cycle.

Q: You dissented when it came to the quantum of the MPC’s rate hike. You have said that a real rate of more than one per cent – if inflation were to fall more