The yield on the benchmark 10-year sovereign bond is now at the highest level in two years. The bond market continues to be spooked by the prospect of inflation accelerating.

The pattern on voting in the most recent meeting of the monetary policy committee (MPC) of the Reserve Bank of India is interesting in this context. The six-member panel that sets interest rates has not seen a consensus since June 2017, with Ravindra Dholakia arguing for either a rate cut when the majority wanted to hold interest rates or a deeper rate cut when the group decision was to reduce rates by 25 basis points.

The most interesting divergence of views was in the August meeting, when Dholakia called for lower rates, Michael Patra argued in favour of higher rates and the other four members voted for the status quo. The dissenting vote in the February meeting was the hawkish one by Patra.

The minutes of the MPC meeting released on Wednesday show that the dovish sentiment has retreated. The bond markets must surely have noticed this change.