When we make repo decisions, rather than just deciding to go up or down, we think more about the level of the policy rate. More specifically, we consider the level of rates relative to a normal or neutral interest rate, defined as the rate which would neither slow down nor speed up the economy.
We also think about these rates not just in nominal terms, but rather adjusted for inflation. Policymaking therefore centres on choosing a setting somewhere along a broad spectrum of real rates, with options ranging from very loose to very tight, and a wide range of choices between these extremes.