The amendments to the RBI Act, which are under consideration of the Government, would take away the mandatory responsibility of RBI to act as debt manager to Government of India and thereby facilitate such separation, which is one of our major medium-term objectives. Third, in pursuance with the recommendations of the Expert Committees set up by RBI and Government of India.
The trigger of this shift in sentiment has been the market perception that the Federal Reserve will soon start reducing its asset purchases and conclude the program by the first half of the following year. Additionally, the estimated time before the first hike in the Fed funds rate has been shortened.