India needs to tighten monetary policy, says IMF

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WASHINGTON, July 2 (PTI): The impact of surging food and fuel prices being felt globally is "not so big" in India but it needs to tighten its monetary policy, the International Monetary Fund (IMF) has said as it warned that some countries will not be able to feed their people and maintain economic stability if the hike continues.

"Some countries are at a tipping point," said IMF Managing Director Dominique Strauss-Kahn at the release of a new IMF study which says the effect of price hike is most acute for import-dependent poor and middle-income countries confronted by balance of payments problems, higher inflation and worsening poverty.

"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.