* S -> aSa | bSb | A
* A -> aA | bA | $\varepsilon$
This way $x$ and $x^R$ are simultanously generated with the start symbol $S$ in the middle. After that $S$ changes to $A$ in order to produce some word $y$ between $x$ and $x^R$.
* * *
Edit: As was pointed out, the language is just $\\{a,b\\}^*$, so there is a simpler grammar (see the other answer).