The development of long-term domestic-currency bond markets is one of the factors that help lower the costs of long-term planning and enhance the ability to undertake long-term investments In particular, investment decisions are less likely to be constrained by having only short-term financing available for longer-term projects, thereby allowing improved decisionmaking for governments, firms, and individuals. These improvements enhance the prospects of economic development.
Higher and more-stable growth combined with a better ability to undertake long-term plans can also improve the fiscal outlook for a country. A better fiscal outlook, in turn, increases confidence, facilitates financial market development, and thus further boosts growth. And, in a virtuous cycle, it reinforces prospects for continued price stability.