InvestorQ : Are there are special benefits for a country to have robust vibrant and broad based debt markets?
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Are there are special benefits for a country to have robust vibrant and broad based debt markets?

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3 years ago
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The debt market allows government to raise money to finance the development activities of the government. It plays an important role in efficient mobilization and allocation of resources in the economy. The Government securities are issued to meet the short term and long term financial needs of the government, they are not only used as instruments for raising debt, but have emerged as key instruments for internal debt management, monetary management and short term liquidity management.

The debt market also provides greater funding avenues to public-sector and private sector projects and reduces the pressure on institutional financing. It also enhances mobilization of resources by unlocking illiquid retail investments like gold. Reduction in the borrowing cost of the Government and enable mobilization of resources at a reasonable cost. It also aids in development of heterogeneity of market participants and in the process it assists in development of a reliable yield curve and the term structure of interest rates.

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