RBI signals long pause, flags inflation risks Five MPC members vote in favour of status quo; one votes for 0.25% rise The Reserve Bank of India (RBI) kept policy rates unchanged for the third consecutive time. Governor Urjit Patel indicated that the recent rise in bond yields was beyond the control of the central bank and a result of fiscal profligacy by the government and the rise in rates in advanced economies. Patel’s post-policy statement assumes significance for interest rates in the economy; particularly when his deputy Viral Acharya said RBI was not there to provide liquidity to manage bond prices. According to bond dealers, the statements indicate the RBI was not interested in yield management anymore and the government will have to heed the market. This could mean a yield push up, which will eventually feed into the bank lending rate at a time when the RBI is working on linking the lending rate to a more market-driven external benchmark. “Now the RBI has made it clea