I don’t quite get this bit: “When the central bank sells government securities (i.e., government securities it previously purchased on the secondary market),”.
Has this been explained elsewhere? Are there other ways to buy government securities, if so can the central bank not use them too?
The central bank is not allowed to purchase bonds diretly from the treasury (except under exceptional circumstances). It's a long-standing convention aimed at maintaining the appearance that the central bank is independent of government. So, it purchases them from the secondary market, i.e. banks, pension funds etc.
I don’t quite get this bit: “When the central bank sells government securities (i.e., government securities it previously purchased on the secondary market),”.
Has this been explained elsewhere? Are there other ways to buy government securities, if so can the central bank not use them too?
The central bank is not allowed to purchase bonds diretly from the treasury (except under exceptional circumstances). It's a long-standing convention aimed at maintaining the appearance that the central bank is independent of government. So, it purchases them from the secondary market, i.e. banks, pension funds etc.