What is Money Market ? (Meaning, Features & Structure)

What is Money Market ?

 (Meaning, Features & Structure)

What is Money Market ?

Meaning of Money Market :- 

The term " Money market " refers to a sector of financial market where short term borrowing and lending transactions occurs. It deals with highly liquid, low risk financial instruments with short term maturities.

Features of Money Market :- 

There are following features related to money market. 

1. Highly liquidity. 

2. Short term instruments. 

3. Rolling monetary policy.

4. Flexible terms. 

5. Conclusion to economic stability. 

Structure of Money Market :- 

The structure of money market are divided in 3 circumstances. 

1. Components 

• Collateral loan market 

• Acceptance market 

• Bill market 

• Call money market 

2. Institutions

• Commercial bank 

• Central Bank 

• Acceptance houses 

• Non banking financial intermediaries 

• Bill brokers.

3. Instruments 

• Commercial bank 

• Treasury bills 

• Call and short notice money market 

• Certificate of deposits

• Commercial papers 

• Repurchase agreement [REPO]

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