The analysis of the relation between sovereign CDS premium and the domestic debt maturity structure: The case of Turkey

Public borrowing plays an essential role in economic growth and development and in increasing economic activity for both developed and developing nations. CDS premium, on the other hand, has begun to emerge as a quite important concept for countries, as it is accepted as an indicator that reflects the current outlook and economy of the country. The CDS premium, which is closely related to the debt markets, has a direct impact on public borrowing and borrowing costs. The aim of this thesis study is to analyze the long-term relationship between Turkey's five-year CDS premium and the average maturity of domestic borrowing, which is considered an important indicator in public debt management. While this relationship is being investigated, various public debt indicators, which have been determined to have an impact on CDS premium in the literature, are also evaluated in the analyses. The ARDL (Autoregressive Distributed Lag) Bound Test approach is used as an econometric method for determining the relationship.