When the national debt is repaid, although the principal and interest are fixed, as a government, there is room for choice when and how to repay it. What kind of way will promote the development of the national economy or adapt to the financial situation is the main foothold when determining the repayment method. Here are some repayment methods of Chinese and foreign national debt.
1, market purchase and sale method
The market purchase and sale method refers to a repayment method in which the government buys China bonds at a suitable time according to the national debt market and pays them off gradually before the maturity. This is the main way for western countries to repay their national debt. The specific way is that the government buys government bonds in the securities market through the open market business of the central bank. When a national debt expires, most of it has been held by the government, and the repayment of the bond is only an internal accounting problem of the government. It should be noted that this method is only applicable to listed government bonds with various maturities, mainly short-term government bonds.
2. Repayment by drawing lots
The method of drawing lots for repayment refers to a method in which a certain repayment ratio is determined in different years during the repayment period of national debt, and the government draws lots to check the number according to the number of national debt. If it promises to repay the principal and interest until the end of the repayment period, all national debt will be paid off by drawing lots. Draw lots can be divided into one-time draw lots and divided draw lots. The former refers to holding a lottery ceremony at a certain time before the maturity of a national debt issued by the government, and drawing all the numbers of the bonds repaid in each period of each year and making an announcement. For example, for the four issues of 198 1- 1984 issued by China, the lottery method is adopted; The latter is to draw lots regularly to determine the number of bonds to be repaid according to the number of installments for government-issued bonds with a certain term, and draw lots in several batches. 1954- 1958 issued the national economic construction bonds of China, and adopted the method of drawing lots by stages.
3. Pay-per-view method
Installment repayment method refers to a way that the government fixes the repayment period of the issued national debt in numerical order and repays it according to the digital maturity date. So it is also called sequence method. This repayment method is not conducive to the circulation of national debt. Because the repayment period of national debt is different, the yield is different, and the buying and selling prices in the market are also different, so this method is not conducive to the stability of the bond market. Pay-as-you-go method is mostly used for local bonds, such as those issued by American states and local governments, because local government bonds are usually not in circulation.
4. One-time repayment method
One-time principal and interest repayment method refers to the method that the government pays the principal and interest of the issued national debt in one lump sum according to the par value after maturity. Treasury bonds and other government bonds issued to individuals (such as national key construction bonds, value-added bonds, special bonds, etc.) are generally repaid in this way in China from 1985.
5, early repayment method
The early repayment method refers to a way that the government can repay the debt in advance when the national debt issued by the government has not expired, but the accumulated funds have fully met the required funds. But sometimes this is not the case, but a country will pay its debts in advance in order to solve some special problems. The above repayment methods of national debt have their own advantages and disadvantages, and which one should be adopted depends on the financial management level and proper application of the financial manager. If we can use it flexibly according to time, we can get better results; If you just stick to a certain method, the effect may be poor. China has adopted the lottery repayment method, early repayment method and one-time repayment method, and the latter is the main method. The market purchase and sale method has never been tried.
_ What is national debt?
National debt, also known as national debt, is a bond issued by the state and a government bond issued by the central government to raise financial funds. Creditor's rights and debt certificates issued by the central government to investors promise to pay interest and repay the principal within a certain period of time. It is the main form of national credit, and national debt will be issued when national funds are tight or economic macro-control is needed.