Any change in withdrawal stance will unsettle markets: Ashima Goyal

'Withdrawal' is now well understood to imply that the repo rate remains disinflationary and is aimed at bringing inflation towards the target, Goyal said

The Reserve Bank of India (RBI) kept the lending rates unchanged at 6.5 per cent earlier this month. Ashima Goyal, an external member of the monetary policy committee (MPC), says most forecasters, including the RBI, see inflation rising again in Q3FY25. In an email interview with Manojit Saha, she says the rise is the reason the MPC would like to see inflation sustainably approach the target of 4 per cent before lowering rates. Edited excerpts:

You have supported the 'withdrawal of accommodation stance' while agreeing with the view that stance is with respect to rates. RBI’s inflation projection suggests that