New Delhi, May 13 -- Indias monetary policy can accommodate temporary supply-side shocks but may require intervention if inflationary pressures persist following the Iran war-driven surge in global oil prices, Reserve Bank of India (RBI) Governor Sanjay Malhotra said.
Speaking at a conference in Switzerland on Tuesday, Malhotra indicated that while initial price shocks may be transitory, policymakers remain alert to the risk of sustained inflation, according to Reuters.
Fuel Prices May Be Adjusted
He noted that if the Middle East conflict continues, the government may need to raise domestic fuel prices. Given Indias adherence to fiscally prudent policies, higher global oil prices are likely to be gradually passed on to consumers.
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