Optimization models for public debt management

Alver, Mustafa Uğur
Management of public debt is crucial for every country. Public debt managers make efforts to both minimize the cost of borrowing and to keep debt stock at sustainable levels. However, due to competition for funds in the continuously changing and developing financial markets, new threats and opportunities appear constantly. Public debt managers construct borrowing policies in order to minimize the cost of borrowing and also to decrease risk by using various borrowing instruments. This thesis presents a mathematical model to determine the borrowing policy that minimizes the cost of borrowing in line with future projections and then seeks to extend it to construct risk sensitive policies that allow minimizing the effects of changes in the market on the cost of borrowing. The model’s application results for determining the borrowing strategies of Turkish Treasury for 100 month horizon have been evaluated through the study.


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Citation Formats
M. U. Alver, “Optimization models for public debt management,” M.S. - Master of Science, Middle East Technical University, 2009.