Egypt crisis may fuel oil prices: Rangarajan

The crisis in Egypt might fuel oil prices temporarily and the Reserve Bank of India (RBI) would continue to tighten money supply to tame inflation, currently at 8.4 per cent, C Rangarajan, chairman of the Prime Minister’s economic advisory panel, said today.

“To the extent the Middle East (West Asia) is affected, it could result in a temporary increase in oil prices,” Rangarajan said.

Global crude prices have already crossed $100 a barrel on the back of the Egyptian crisis.

Rangarajan said as long as inflation continued to remain uncomfortably high, RBI would continue to follow monetary tightening.

Inflation was expected to be seven per cent by the end of this financial year and economic growth would moderate in the second-half, he added.

“The 8.6 per cent growth is along expected lines. However, since in the first half, we grew at 8.9 per cent, it implies there would be some slowdown in the second-half,” he said.