MSS ceiling fixed at Rs. 50,000 cr for current fiscal

April 21, 2014 07:09 pm | Updated May 21, 2016 12:39 pm IST - Mumbai

The Reserve Bank of India (RBI) has fixed the quantum of intervention through Market Stabilisation Scheme (MSS) at Rs. 50,000 crore to manage liquidity.

Under the MSS, RBI, on the behalf of government, absorbs liquidity by issuing Treasury Bills and/ or dated securities. “The ceiling for outstanding balance under the MSS for the fiscal year 2014-15 has been fixed at Rs. 50,000 crore,” the RBI said in a statement.

“This ceiling will be reviewed when the outstanding balance reaches the threshold limit of Rs. 35,000 crore,” it said.

The government launched MSS in consultation with RBI in 2004 with the objective to absorb excess liquidity, arising out of significant foreign exchange inflows, by issuing treasury bills or dated securities.

The Government issues treasury bills and/ or dated securities under the MSS. This is in addition to its normal borrowing requirements.

For the current fiscal, the government has pegged its borrowing requirements at Rs. 5.97 lakh crore. Of this, about 61.5 per cent or Rs. 3.68 lakh would be borrowed in the April-September period.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.