The purpose for which the Central Bank sells securities is to
Answer Details
When the Central Bank sells securities, it aims to reduce the amount of cash in the economy. This is because when people buy these securities, they have to pay for them with cash. By taking cash out of circulation, the Central Bank aims to reduce the amount of money that people and businesses have to spend, which can help to reduce inflation.
In addition, when the Central Bank sells securities, it can also help to increase the interest rate. This is because when there is less cash in the economy, lenders can charge higher interest rates for loans, since there is less competition for available funds. The Central Bank may also use the proceeds from the sale of securities to buy back previously issued securities, which can help to increase the interest rate.