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Investing in government securities: What does it mean?

My Man

Every financial year, from June to July, the government needs money to run its operations. Most of the money comes from taxes. However, the taxes are never enough, forcing the government to fill the deficit by borrowing.

The government can either borrow from local investors or foreign investors. The way the government borrows from the local investors, which includes individuals as well as organisations such as commercial banks and pension schemes, is by issuing Government securities.

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