What is money market ? Money Market is a short-term credit market which deals with relatively liquid and quick marketable financial assets such as Treasury Bills, Commercial Bills, Certificates of Deposit, Commercial Paper’s etc. the money market deals with short term debt securities that mature in a year The money market securities are traded over the phone or any electronic system unlike the bond market that trade in exchanges through brokers.
Features of Money Market Market for short-term funds Deals in financial assets No formal place No brokers Comprises several sub-markets components
Significance of money market Development of Trade & Industry Development of Capital Market Smooth Functioning of Commercial Banks Effective Central Bank Control Formulation of suitable monetary policy
Constituents of the money market Call Money Market Collateral Loan Market Bill market or Discount Market Acceptance Market
Financial institutions in MoneyMarket Commercial Banks Non-Bank financial institutions(example: insurance co. & other business corporations) Acceptance houses Central Bank