The RBI has benn authorized by the government to issue debt instruments up to a maximum of Re. 50,000 crore under the Market Stabilisation Scheme (MSS) for 2014-15. Last year too, the limit was the same.
The MSS seeks to strengthen RBI’s ability to conduct exchange rate and monetary management operations so as to ensure stability in the forex market and conduct monetary policy in line with its goals. The ceiling for the outstanding balance under the scheme will be reviewed when it reaches the minimum of Re. 35,000 crore. Under the MSS, Treasury Bills and Dated Securities up to a fixed limit are issued by the auction route.
The bills and securities for MSS are matched by an equivalent cash balance held by the Government with the RBI.