Creating an independent debt office

In many countries including India, the central bank is responsible for public debt management. Historically this has been because central banks intervene in financial markets so as to affect liquidity and so have more market expertise than the finance ministry. This does, of course, give rise to a number of conflicts of interest that have been the basis for the Financial Sector Legislative Reforms Commission’s (FSLRC) rationale for setting up an independent public debt management agency (IDMA).

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