RBI hikes MSS ceiling to Rs 1.10 lakh cr

MUMBAI: In order to mop up excess liquidity from the system, the Reserve Bank today announced increase in the ceiling of Market Stabilisation Scheme (MSS) to Rs 1.10 lakh crore for 2007-08 from Rs 80,000 crore presently.

The government, in consultation with the RBI, increased the ceiling for the outstandings under MSS by Rs 30,000 crore for the year 2007-08, the central bank said in press release. Under the MSS, the Reserve Bank conducts periodic auctions of dated government securities and treasury bills to mop up excess liquidity from the system.

The interest on the money raised under the MSS, which is kept in a separate account with the RBI, is paid by the government. The current MSS outstandings are at Rs 78,000 crore and the threshold for revising the ceiling has been fixed at Rs 95,000 crore, it said.