Govt bond auctions: they get money then what do they do with it?

People buy gov. bond then gov. gets money. How do they manage these money? Dose it help reduce country's debt? They will take these money to invest in some ways with higher returns than the bond yield before its expires then give money back to people?

How gov. bond relates to central bank in each country?

Thanks.

Issuing gov bonds actually increases the debt of the gov..And no, they don't invest the money somewhere to get a higher return...

Gov bonds are actually issued to help the gov. finance short and long term projects...It also helps the gov. to meet it's short and long term financial obligations...

The system is different from country to country though...In some countries, the auction is handled by the treasury, in other countries, the auction is handled by the central bank, so it depends on the country...

Gov bonds are usually a very good way to roll over their debt also


Regards,

Nader

Sometimes gov buy back bonds. Like what the Feds did as alternative to printing cash.

This gave the banks some confidence on the US dollars and in turn are optimistic about the prospect of the US economy. Which bolster the sluggish GDP numbers.