Why government need to issue the securities?

Need for issuing securities by Government

Government securities are usually issued for two different reasons. The primary reason is that most government securities are issued to raise funds for government expenditures. The federal government issues treasury securities to cover shortfalls (deficits) in its annual budget. Additionally, It often issue bonds for construction of schools, libraries, stadiums, and other public infrastructure programs.

A central bank of a country, such as the NRB, sells debt securities for another reason- to control the supply of money in an economy. If the NRB wants to slow the growth rate of money in the economy, it will sell government securities. This means that it is sucking up money from the economy and replacing them with government securities, which results in a slowing the rate of growth in the money supply. Slowing the rate of money's growth in an economy will help to keep inflation under control.