Market Stabilisation Scheme (MSS)
A scheme introduced to manage excess liquidity from capital inflows.
Introduction
Market Stabilisation Scheme was introduced to manage excess liquidity from capital inflows.
Meaning of MSS
Under MSS, RBI issues government securities to absorb surplus liquidity.
Key Feature
Funds raised under MSS are kept in a separate account and not used for government spending.
Purpose
It prevents inflation caused by excess foreign capital inflows.
Difference from OMO
MSS securities are issued specifically for liquidity absorption.
Conclusion
MSS helps RBI maintain macroeconomic and monetary stability.