Interest rates may stay low despite West Asia turmoil

THE US AND Israel’s attack on Iran is expected to weigh more on economic growth than inflation

- JASPREET KALRA & IRA DUGAL

THE US AND Israel’s attack on Iran is expected to weigh more on economic growth than inflation, which will encourage the Reserve Bank of India (RBI) to keep interest rates low, three sources familiar with policymakers’ thinking and analysts said.

The conflict, which has rippled out across much of West Asia, has pushed up oil prices by about 15%, disrupted gas flows from the region and triggered selloffs in equity, debt and currency markets.