Which of the following is/are correct regarding Market Stabilisation Scheme (MSS)?
Answer: D
Market Stabilisation Scheme (MSS) was introduced in April 2004 following the Memorandum of Understanding between the Government and the Reserve Bank, whereby, the Government issues securities specifically for the purpose of sterilisation operations. The issuances of Government paper under the MSS are undertaken to absorb rupee liquidity created by capital flows of an enduring nature. In order to neutralize the monetary and budgetary impact of this particular instrument, the proceeds under the MSS were parked in a separate deposit account maintained by the Government with the Reserve Bank which was used only for the purpose of redemption and/or buyback of paper issued under the MSS