India Needs To Tighten Monetary Policy: IMF - July 3, 2008

India needs to tighten its monetary policy even though the impact of surging oil and food prices being felt globally is "not so big" in the country, the International Monetary Fund (IMF) has said. Some countries really are at a tipping point, said IMF managing director Dominique Strauss-Kahn at the release of a new study based on information and analysis by Fund economists working on 162 countries.

If food prices rise further and oil prices stay the same, some governments will no longer be able to feed their people and at the same time maintain stability in their economies, he said.They need good policy options and they need help from the international community.

Their challenge is ours, he added.Strauss-Kahn said the findings of the study underscored the need for a broad cooperative approach involving the countries affected, donors, and international organizations to cope with the effects of high prices.Although India has not been flagged in the IMF report because of many mitigating factors, the broad general policy implications apply, a senior IMF official said.