The Reserve Bank of India’s deputy governor said on Sunday, that monetary policy would be affected by events in Egypt.
Subir Gokarn, deputy governor at the central bank, said that when they had announced the policy on January 25, they had not anticipated events which would have impact on oil prices.
He further said that a complete new environment has been created in a very short time after the announcement.
More than a third of the world's oil is produced in Middle East and North Africa and crisis in Egypt have created unrest in spreading the oil. Majority of the oil produced in Middle East is shipped through Egypt but Egypt’s crisis has disturbed the distribution.
To hold down the inflation tightly, India’s central bank raised interest by 25% and warned of persistently higher food prices unless steps are taken to boost supplies.
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