New Delhi, March 20 -- The US-Israel military operation against Iran, which began on 28 February, has spooked the financial markets and global trade. With attacks extending to energy infrastructure, including gas facilities and production sites in the Gulf, governments and financial markets fear that the conflict may escalate further. In an email interview with Livemint, Radhika Rao, senior economist & executive director, DBS Bank, shares her views on the likely impact of escalating Middle East tensions on interest rate changes.

She also gives her reasons explaining why this conflict is unlikely to disrupt the structural strengths of the Indian economy. She spoke about her expectations for the future price movement of the Indian rupee, w...