In order to understand what external public debt is, you first need to understand what public debt is. So, public debt is understood as the amount of debt on government loans. It arises in connection with the need to attract financial resources and meet the needs of the population. Almost all countries of the world have public debt. However, it arises for various reasons. It may arise if the country's economic situation is not stable, or it may simply arise as an integrated factor in stabilizing and developing the economy. The emergence of public debt can affect the recovery of the economy in the country and solve acute social problems.
There is a subdivision into domestic public debt, as well as external public debt. So, domestic government debt is a loan of cash (resources) from the population, banks, corporations, and other financial institutions. In fact, a loan is made to the nation itself. Along with the positive aspects of the emergence of public debt (internal), there are also a number of negative ones. Debt repayment is carried out at the expense of the budget (taxpayers). To reduce the state. debt taxes may increase. The country's entry into the loan market intensifies competition in the money market, interest rates on money capital increase. This deprives the private sector of a part of investments and inhibits the economic development of the state.
Domestic debt lenders: banks, corporations, households, credit and financial institutions.
External public debt - external loans and other debt obligations to non-residents by creditors. It involves the export and transfer of part of the manufactured product outside the state. The presence of external public debt is the norm. However, its increase can become dangerous and lead the state to dependence on creditors, undermining public confidence.
In world practice, use the relative parameters of the external public debt (special indicators). They include the ratio of payments on debt obligations to the export of goods (services).
Creditors of external debt are: states, international organizations of a financial orientation, for example: IMF; International Bank for Reconstruction and Development, etc.
The conversion of public debt is a set of financial and legal mechanisms that are aimed at reducing the country's debt. Upon conversion, external debt is replaced with other types of obligations. So, perhaps repayment of state. debt by supply of goods, transfer of debt to another state, offsetting financial claims, etc.
State debt of the Russian Federation - obligations on debts of Russia to legal entities and individuals, foreign states, organizations of the international level, as well as other international entities. The guarantor of the solvency of the state is the treasury and is provided with all property owned.
Depending on the currency, there is a subdivision into the external public debt of the Russian Federation, as well as the internal public debt of the Russian Federation.
Domestic public debt, denominated in rubles. The debt includes:
- the main (i.e. nominal) amount of the debt of the Russian Federation on government securities;
- the volume of the main debt on loans received by Russia;
- the amount of debt (principal) on budget loans (loans) received by Russia from budgets of other levels;
- the volume of obligations under the state guarantees provided by Russia.
External public debt denominated in foreign currency. The debt includes:
- the volume of obligations under the state guarantees provided by Russia;
- the amount of debt (principal) on loans received by Russia from governments of foreign countries, credit organizations, as well as companies and international financial organizations.