Global factors will affect monetary policy: RBI

PUNE: Reserve Bank of India (RBI) governor YV Reddy said on Saturday that the country’s price situation would require greater “sensitivity”, and global factors would play an increased role in monetary policy.

Just two days after raising key official interest rates in a surprise move, Reddy said that the central bank would make every effort to contain inflation between 5.0 and 5.5 per cent this year.

Reddy said that actions would be considered in response to relevant developments. “GDP growth has been quite strong ... (there is) definitely increased intensity of economic activity than what was considered at that time,” Reddy said referring to April when he surprisingly left rates unchanged.