Managing Director of the International Monetary Fund Kristalina Georgieva on Friday said that the increase in oil prices will hurt the Indian economy, reported PTI.

After Russia invaded Ukraine, oil prices increased exponentially, reaching a 14-year high last week. Higher costs are detrimental to India as it imports 85% of its crude oil.

The price of Brent crude stood at $112.63 (Rs 8,597.90) on Friday, according to Bloomberg.

Speaking in Washington at a media roundtable on the Ukraine crisis, Georgieva underlined that all countries need to shield the most vulnerable populations from the increase in prices.

“Not only energy but also food prices for countries where this is going to be a significant factor,” she said, according to PTI.

Gita Gopinath, the first deputy managing director of the International Monetary Fund, who also participated in the roundtable, said that as India relies heavily on oil imports, the increase in prices will dent the purchasing power of households.

“Inflation in India is close to around 6%, which is the upper end of the inflation band for the Reserve Bank of India,” Gopinath said.

India’s retail inflation for January rose to 6.01%, breaching the upper margin of the limit of the price rise indicator set by the Reserve Bank of India, government data showed on February 14.

The central bank aims to keep retail inflation within the range of 2% to 6%. Gopinath said that increasing inflation is a challenge for a country’s monetary policy.