Riigilainad

Riigilainad, also known as government bonds or treasury bonds, are debt securities issued by a national government. When a government needs to raise funds, it can borrow money from investors by selling these bonds. In return for lending their money, investors receive periodic interest payments, known as coupon payments, and the principal amount back when the bond matures.

The purpose of issuing riigilainad can vary. Governments may use them to finance public projects such as infrastructure development, healthcare, or education, or to cover budget deficits. The issuance of riigilainad is a common tool for fiscal policy, allowing governments to manage their finances and stimulate economic activity.

The safety and reliability of riigilainad are generally considered high, especially those issued by stable, developed countries. This is because governments have the power to tax their citizens and control their economies, making them less likely to default on their debt compared to corporations. Consequently, riigilainad often offer lower interest rates than corporate bonds.

Investors in riigilainad include individuals, pension funds, insurance companies, and foreign governments. The market for riigilainad is typically large and liquid, meaning it is relatively easy to buy and sell these securities. The value of riigilainad can fluctuate in the secondary market due to changes in interest rates, inflation expectations, and the perceived creditworthiness of the issuing government.