India’s monetary policy would be “conditioned” by risks to global economic growth even as inflation remained a “visible” concern, Reserve Bank of India’s (RBI’s) Deputy Governor Subir Gokarn said.
“It is quite likely that inflation risk will continue to be the dominant factor of our policy reference,” Gokarn, who is in charge of monetary policy at RBI, said in an interview in Warsaw today. “But the pace and magnitude of actions will be conditioned by the global uncertainty.”
Gokarn’s reference to Europe’s debt crisis for the second time in a week highlights the dilemma RBI faces in tightening interest rates to curb inflation. India’s benchmark wholesale-price index climbed to 9.59 per cent in April.