With Reserves Management Government Securities (RMGS) and hence not having to draw down on Government Deposits (GDs), can the Government offset planned tax increases?
The amount of Government Deposits (GDs) available does not determine the amount of budget available for the Government's spending. The Government's overall expenditure is bounded by its overall revenues (and NIRC) and the current reserves accumulated during its term. This limit is determined by our Constitutional rules to ensure fiscal prudence, and is not determined by how much deposits the Government has with the central bank.
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