Mumbai: The crisis in Egypt adds to the uncertainty about oil prices and will have an impact on the Indian central bank's actions, Reserve Bank of India Deputy Governor Subir Gokarn has said.
Protests demanding an end to President Hosni Mubarak's 30-year rule erupted on January 25 in Cairo and have left scores dead, according to the United Nations.
Concern that unrest in Egypt could force the closure of the Suez Canal, halting crude shipments through the crucial waterway, sent North Sea Brent crude oil prices above $100 (Dh367) a barrel for the first time since October 2008.
Inflation threat
"A whole set of events unfolded in the Middle East which are starting to have an impact on oil prices and that is something which we did''t anticipate at the time of making the policy announcement on January 25," Gokarn said on Saturday in a speech in Dabolim, in the western Indian state of Goa. "It is going to have an impact on our thinking, on our actions going forward."
Reserve Bank of India Governor Duvvuri Subbarao on January 25 increased the key repurchase rate for the seventh time in a year, boosting the measure by a quarter of a percentage point to 6.5 per cent, as Asia's third-largest economy battles to rein in inflation. India meets about three-quarters of its annual energy needs from imports.
Oil prices could more than double if the unrest in Egypt forces the closure of the Suez Canal, Venezuelan Oil Minister Rafael Ramirez said on Friday.
