THE MAIN FACTORS SHAPING THE STATE'S DEBT POLICY AND DEBT STRATEGY IN THE REPUBLIC OF AZERBAIJAN

Abstract

Public debt is the total amount covering the budget deficit in a certain period of time. The correct management of the debt structure means the set of operations carried out until the time when the debt is zeroed by issuing the debt and paying off the principal debt and interest thereafter. In this regard, in each state, a special institution responsible for the mentioned issues is involved. The purpose of debt strategy management is to ensure the achievement of the main economic and social goals by making certain adjustments or various additions to the amount, composition and repayment period of debts. From this point of view, debt management is closely related to both fiscal (budget-tax) and monetary policy of the state. Adjustments in the amount of debt, i.e. reducing or increasing the amount of the debt, regulating the debt in terms of duration is one of the important issues of debt management. It should be noted that these operations include adjustments to the amount and composition of the debt and a number of debt policy instruments that will ensure the achievement of certain economic goals. In addition, another goal of managing debt strategies is to use the resources obtained through borrowing in the most beneficial way for the stability and development of the national economy and to get rid of the debt burden at the lowest cost. This issue is one of the most important and most successful elements in the debt strategy. Public debt is the total value covering the budget deficit in a certain period of time. In addition, another goal of managing debt strategies is to use the resources obtained through borrowing in the most beneficial way for the stability and development of the national economy and to get rid of the debt burden at the lowest cost. This issue is one of the most important and most successful elements in the debt strategy. The most important factors that require attention in the debt strategy are: - Selection of the minimum debt burden for the State; - Sale of bonds and bills of any amount or as needed; - Adjustment of the borrowing amount and conditions to economic requirements; - Debt reduction as appropriate opportunities arise. Also, the main principle of strategic debt management is that the amount and structure of the public debt should be in accordance with the requirements of the economic situation and the main goals. At the same time, it should be taken into account that it is natural for the state to try to reduce its debt burden when appropriate opportunities arise. However, the policy of alleviating the debt burden begins first of all with the logical and correct selection of the borrowing time and other necessary measures. For example, during recessions when interest rates are low, it is more appropriate for the government to borrow. Because in general, the interest burden of the debt attracted by the state will be less. On the other hand, if there is a high interest payment obligation in the current period and if interest rates are likely to decrease in the future, it is useful to wait for the market interest to decrease through short-term borrowings. In the research paper “The main factors shaping the state's debt policy and debt strategy in the Republic of Azerbaijan” was talked about the debt policy, which is of special importance for any state and plays an indispensable role in its financial system. Nowadays, due to the fact that it plays an important role in the economic development of the country and the regulation of debt problems, the correct processing of the public debt has been reflected. Otherwise, an improperly prepared debt policy that does not take into account modern realities can lead to negative consequences and lead to unpleasant situations. From this point of view, the correct implementation of the policy related to the topic we are studying has been evaluated as one of the most relevant issues. In the article, the goals put forward in the strategy for public debt in the country are described. Based on the debt policy carried out in our country, it was brought to attention that the state has a wide and positive experience, both in terms of benefiting from the debt system and in terms of paying off the public debt. Recently, the dynamics of internal, general and external public debt have been given and statistical indicators have been shown, emphasizing the great importance of replacing foreign debt with domestic debt as much as possible. At the end of the article, it was mentioned that the main goal of the debt strategy is the gradual reduction of the public debt. Keywords: debt strategy, financial system, debt system, economic development, debt dynamics.