2000 After Inflation Effects of Domestic Debt Management Policy in Turkey

Abstract

The public deficit and public expenditures resulting from the reduction of public revenues in this context and the financing of public expenditures by borrowing lead to the interest load on the budget, which leads to the monetization of the debt, the unsustainable debt spirals and the deterioration of the macroeconomic balances. Public deficits in public sector financing balance are seen as the main source of inflation, one of the most important building blocks of macroeconomic indicators. In this study; public gross and net debt stock statistics, domestic borrowing, principal, interest, domestic debt service and total domestic debt roll-over ratios and inflation data were examined for the period of 2000-2017, and a high domestic borrowing as a result of domestic debt management policy was found to be feeding the high inflation phenomenon. In this context, it is of great importance to establish an internal debt management policy that is effective, transparent legal framework in the fight against inflation and to observe the risks that may arise in borrowing.

Keywords

• Debt Management
• Domestic Debt Management
• Inflation