The global economic situation was becoming more complex and volatile, K.C. Chakrabarty, a deputy governor at the Reserve Bank of India said on Friday, a day when the BSE Sensex touched its lowest level since June 2010, tailing a global equities market rout.

European shares plunged to 14-month lows on Friday after a steep sell-off in global markets on growing concerns the U.S. economy could be heading towards another recession and on jitters the euro zone debt crisis could spread to Italy and Spain as well.

He also said India's current level of inflation was unacceptable.

The central bank last week surprised markets with a steeper-than-expected interest rate increase of 50 basis points, the 11th rate hike since March 2010, to combat high inflation which quickened to 9.44 percent in June.

The governor of the Reserve Bank of India, Duvvuri Subbarao on Thursday said he thinks there is no change in the acceptable level of inflation and there is "no new normal to inflation".