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New Delhi, Oct. 3 The Government has hinted that it could absorb more rupee funds from the market so as to indirectly help the RBI rein-in the appreciating rupee. The Finance Minister, Mr P. Chidambaram, said that the Government would review the ceiling on market stabilisation scheme (MSS) bonds if the RBI requested it to do so.

Indications are that the Finance Ministry would review the MSS ceiling this week.

After three hikes this fiscal, the current ceiling on MSS bonds issuance is at Rs 1,50,000 crore ($37.7 billion). These bonds suck out the liquidity from the market on account of the RBI’s forex market interventions.

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