By keeping interest rates unchanged, RBI bats for policy continuity

Increase in bond yields poses a conundrum to policymakers, and unless quickly reined in, could derail growth recovery

The monetary policy announcement was on expected lines. What was pleasant was Governor Urjit Patel’s interaction after the meet, indicating the Reserve 

Bank of India’s (RBI’s) desire to support and nurture an incipient recovery, despite some possible upside risks to inflation. This clearly had a soothing impact on debt markets that have been plagued by glorious idiosyncrasies ever since the RBI cut the repo rate in August 2017. 

The increase in bond yields poses a conundrum to policymakers, and unless quickly reined in,