Us Attack Fuels Panic

Much will depend on whether the US action has a long-term effect. If it has, and the US has been known to be opposed to the food-for-oil deal for Iraq, oil prices would remain high. The immediate effect could be a delay in remittances in anticipation of a weakening of the rupee. The government may also not allow oil prices to be impacted directly, but that strategy could play havoc with its policy on the fiscal deficit.