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What is moderate (maturity matching) financing policy?

Finance

What is moderate (maturity matching) financing policy?

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Moderate financing policy is defined as the working capital approach to financing in which liabilities and assets with similar terms of maturity are matched. This is done in a way that ensures balances of payments, in the long run, is settled with long-term debt and short-run with short-term debt. The aim is that each asset will be remunerated with instruments of debt that share similar maturity dates/periods.