'Closer to where rates have to be cut to avoid excessive real interest'

Varma says that since monetary policy acts with lags of three to five quarters, rate actions must be based on projected inflation rather than past inflation prints. In an interview with Manojit Saha

JAYANTH R VARMA, an external member of the Reserve Bank of India’s monetary policy committee, says that since monetary policy acts with lags of three to five quarters, rate actions must be based on projected inflation rather than past inflation prints. In an interview with Manojit Saha, Varma elaborates on his views. Edited excerpts:

For the first time in this tightening cycle, you have said, “If at all there is a stance, it should be neutral”. Why do you think, in case the stance is changed, it should be neutral?
 

As I mentioned in my statement, I think we are