2. Public Debt Management Reforms in Turkey

The public debt became a vital economic problem with rising debt burden for all budget deficit producing countries in the last decade. Turkey is not an exception, but it has made great improvement in its public debt risk management practices since 2002. With the help of fiscal discipline, the efficient debt management practices helped to rebuild the confidence in the money market and improved confidence reduced the risk perception. The risk management tools were used to shape the new borrowing policy, and government debt stock was gradually transformed into a lower risk profile against interest and exchange rate fluctuations. The market confidence and improved debt profile ensured to reduce the cost of borrowing and lengthened the average maturity of borrowing. In this chapter, Turkey’s journey to contemporary public debt risk management practices and outcomes are discussed.