There are several ways for the state to speed up #state #budget revenues to finance needs during hostilities. The first is the printing of money, which increases the money supply and accelerates inflation, and causes the depreciation of the national currency.
➖ The second is an increase in taxes, which leads to an increase in the burden on businesses and employees. And the third is the borrowing of the state through the issuance of debt securities. One type of public debt is #military #bonds.
➖ For example, during the First World War, the US government raised more than USD 20 billion through military bonds (then called Liberty Bonds). And during World War II, the US raised more than USD 185 billion through defence bonds (later renamed as military bonds). More than 84 million Americans have bought military bonds.
➖ Typically, such bonds have lower yields and longer maturities than other government debt, which potentially extends maturities for decades. Ukrainian military bonds have similar characteristics to debt, which it regularly sells in peacetime, with a maturity of up to 1.3 years.
➖ Military bonds are an #effective #tool for raising funds for the state, as it is not necessary to “print new money”, instead household savings and funds of legal entities are used. In the long run, we can talk about increasing public confidence in the stock market and intensifying investment in securities in peacetime.
➖ Since the beginning of russia’s full-scale attack on Ukraine, the Ministry of Finance has held 23 auctions for the sale of military bonds, raising for the state budget almost UAH 50 billion, USD 93.8 million and EUR 176.5 million.
📌 On April 27, 2022, the first issue of military bonds for about 1,000 legal entities and individuals worth UAH 3.3 billion was repaid. Some of these funds have been reinvested in newly issued military bonds to further #support of #Ukraine.
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