The purpose for which the Central Bank sells securities is to

Commerce

WAEC 2025

A. reduce cash in the economy
B. increase the interest rate
C. reduce the interest rate
D. increase cash in the economy

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Correct Answer: Option A

Explanation

The Central Bank sells securities to reduce cash in the economy. This is a monetary policy tool known as open market
operations. When the Central Bank sells securities, it is taking money out of the economy, thereby reducing the amount
of cash available in the economy.

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