Real policy rateThis is why the case for a negative real policy rate is unconvincing. Against a repo rate of 5.25 per cent, that means the real rate is effectively negative. A real rate of at least 1 per cent is the minimum consistent with price stability and financial discipline. If the goal is a healthier 2 per cent real rate, it should be even higher. That means restoring a positive real rate, even if it is uncomfortable in the near term.