World Bank Group2016-04-192016-04-192015-05-31https://hdl.handle.net/10986/24088This background note focuses on the use of bond buybacks and bond exchanges in the domestic government securities market. The objective is to provide an overview of their functions and of the procedures that facilitate their implementation, using country examples as illustrations.en-USCC BY 3.0 IGOAUCTIONCAPITAL LOSSDEFICITCAPITAL MARKETSHOLDINGREVERSE AUCTIONSLIABILITYACCOUNTINGMARKET DISTORTIONSPUBLIC DEBT MANAGERSBOND PRICEDIRTY PRICESUNIFORM-PRICEREPOINTERESTHOLDERS OF BONDSLIQUIDITY RISKSMATURITY DATEINTEREST RATEOPTIONEXCHANGEBANKING SYSTEMLIQUIDITYDEBT MANAGEMENTDOMESTIC MARKETILLIQUID MARKETPORTFOLIOOLD BONDSBONDSCAPACITY BUILDINGBENCHMARK BONDDISCOUNTLEVEL OF INTEREST RATESBORROWING PLANGOVERNMENT BONDBOND YIELDSINVESTOR BASEMATURE MARKETSMARKET INFORMATIONCASH FLOWSINSTRUMENTSBUDGETBOND AUCTIONSPRICE DISCOVERYMARKET PARTICIPANTSMATURITYBENCHMARK MATURITYAMOUNT OF CAPITALMARKET LIQUIDITYMARKET STABILITYLACK OF TRANSPARENCYBOND INDEXCURRENCYBOND ISSUESMARKET DEVELOPMENTSECURITIES MARKETSETTLEMENT DATECAPITAL GAINSDEBT MANAGEMENT AGENCYMARKET PRACTICEPORTFOLIOSBUYBACKMARKET MAKERSCONVERSIONSBOND ISSUANCETRADINGPRIMARY DEALERSREPO MARKETSDEBT OUTSTANDINGINTEREST RATESCASH PAYMENTRISK MANAGEMENT TOOLSREVERSE AUCTIONMARKETSDEBTPRICE TRANSPARENCYMARKET MAKERRETURNSETTLEMENTBUDGET DEFICITPUBLIC DEBT MANAGEMENTDOMESTIC DEBTCOUPON BONDSNATIONAL TREASURYGROSS DOMESTIC PRODUCTINVESTMENT STRATEGYINVENTORYCLEAN PRICEBORROWING COSTGOVERNMENT SECURITIES MARKETSBENCHMARK BONDSFINANCEINTEREST RATE RISKSMARKET PRICEGOVERNMENT SECURITIES MARKETMARKET INTEREST RATEGOVERNMENT SECURITIESTRANSACTIONSBUY BACKREPO MARKETAUCTIONSEMERGING MARKETSTRANSACTIONSECURITIES MARKETSINVESTORSBOND MARKETSINCOME SECURITYUNIFORM PRICE AUCTIONSGOODINTEREST RATE SWAPSFUNGIBLEUNIFORM PRICEBUY BACKSTRANSPARENCYCOUPONSBOND AUCTIONGOVERNMENT BOND MARKETSMARKET CONDITIONSBUDGET SURPLUSMARKET PRICESBOND PORTFOLIOFUTURESECONDARY MARKETSDEBT SERVICING COSTEXCHANGESMATURITY DATESYIELD CURVEFINANCING REQUIREMENTSISSUANCEBIDSLIQUID BENCHMARKSMARKETT-BILLSLOCAL CURRENCYMARKET RISKDIRTY PRICEINVESTMENT POLICYBORROWING REQUIREMENTSSECURITIESPUBLIC DEBTTREASURYPRICE MOVEMENTSHOLDINGSCURRENCIESFORWARD RATEGOVERNMENT DEBTGOVERNMENT BONDSINTERESTSDEBT MARKETINVESTORBUYBACKSCALL OPTIONSECURITYPRIMARY DEALERINVESTMENTPRIMARY DEALER SYSTEMSOUTSTANDING DEBTBONDCOLLATERALFUNGIBLE SECURITIESCOUPONBIDREINVESTMENTMARK-TO-MARKETDEBT MARKET DEVELOPMENTOUTSTANDING AMOUNTRISK MANAGEMENTLENDINGGLOBAL FINANCEINTEREST RATE RISKSWAPSMARKET PRACTICESMATURITIESINSTRUMENTLIABILITY MANAGEMENTDEBT SERVICINGARBITRAGESECONDARY MARKETLIABILITIESHEDGEOLD BONDDEBT MATURITYWorking PaperWorld Bank10.1596/24088