Reddy says RBI caught unawares on inflation

The Reserve Bank of India governor YV Reddy admitted that the July inflation rate, which touched a three-year high of 7.51% in end-July, was higher than what the monetary policy in May '04 had visualised.

Mr Reddy has attributed a significant portion of the hike in inflation to 'imported price shock,' though some amount of upswing in prices was expected during the period.

Speaking to the media at the convocation ceremony at the National Institute of Bank Management (NIBM), Mr Reddy said, "Even