Expect real repo rate to stay elevated for a while: MPC external member

In a Q&A, Jayanth Varma says while GDP growth may even surpass the forecast rate, he still thinks growth is fragile due to several factors

Jayanth Varma, external member of the monetary policy committee, says monetary policy should focus on the real repo rate and not the nominal repo rate in an email interview to Manojit Saha. Edited excerpts:

You started saying “The outlook on inflation and growth has changed only marginally between the April meeting and this meeting.” Do you still think growth is fragile? Is that 6.5 per cent projection for FY24 optimistic?

If all goes well, we may well hit or even surpass the forecast growth rate. But a lot of things can go wrong, and the MPC should in my view keep a