What is MMS? If you think Multimedia Messaging Service youare right! But in case if it relates to financial jargons, what is it? It isMarket Stabilisation Scheme. It was introduced through an agreement between thegovernment and the Reserve Bank of India in early 2004. Under the scheme, theRBI issues bonds on behalf of the government and the money raised under thebonds is impounded in a separate account with the RBI.
“When the local currency starts strengthening, to stem therise of local currency, the RBI aggressively buys dollars from the market. Forevery dollar the RBI bought, an equivalent amount of Rupees flows into thesystem and that, in turn, is sucked out by bonds, floated under the MMS,” saysProfessor Simply Simple. The fictional character is the main lead in the book “who explains the terms to people with no or little understanding of thefinancial jargons.
As a matter of fact, Tata Mutual Fund has brought out aninformative edition “ 'Simplifying Financial Jargons' with Professor SimplySimple. The book is aimed to make the common man aware about the financialaspects “ making it easy to understand.
On money markets, the Tata Mutual Fund's Professor says:“Money market securities are essentially issued by governments, financialinstitutions and large corporates. These enable large institutions and thegovernment to manage their short term cash needs.” However, he goes on to addthat money market instruments trade in very high denominations “ and as aresult, the participation of individual retail investors is limited.
The Professor points out: “...most people have themisconception that finance is complicated and best left to experts. Managingthe finances of a corporate or running a bank is best left to experts.
