Q. “Surplus liquidity of a more enduring nature arising from large capital inflows is absorbed through sale of short-dated government securities and treasury bills” – described as?
Answer: C
Notes:
Explanation: Market Stabilisation Scheme (MSS) is an instrument for monetary management was introduced in 2004.
- Surplus liquidity of a more enduring nature arising from large capital inflows is absorbed through sale of short-dated government securities and treasury bills.
- The mobilised cash is held in a separate government account with the Reserve Bank. The instrument thus has features of both, SLR and CRR.
Source: Ramesh Singh