Market Stabilisation Scheme (MSS) annual ceiling increased

In accordance with the provisions of the Memorandum of Understanding (MOU) of the Market Stabilisation Scheme (MSS), the annual ceiling for 2007-08 is Rs.80,000 crore as against the annual ceiling of Rs.70,000 crore for 2006-07. The ceiling is subject to revision at a threshold level which has been fixed at Rs.70,000 crore for 2007-08. The revised ceilings and thresholds have been agreed upon between the Government of India and the Reserve Bank.

It may be recalled that RBI had on March 2, 2007 announced modified arrangements for liquidity management. Under these arrangements, the Reserve Bank, subject to variations in liquidity, announce every Friday the possibility and the quantum of MSS issuances, covering the Treasury Bills and dated securities under MSS, for the succeeding week. These arrangements would continue until further notice.

To read full details of RBI's modified arrangements for LAF and MSS to manage liquidity ... Click here

NOTE- The Reserve Bank currently conduct liquidity management largely through the Liquidity Adjustment Facility (LAF), which is intended as a window for adjusting day-to-day liquidity mismatches, and the Market Stabilisation Scheme (MSS), which is used for addressing large swings in liquidity conditions which could have a more durable character.

Click here for more RBI policies & notifications

CLICK FOR MORE FEATURES & STORIES