This document presents information about money market instruments. It begins with an introduction defining the money market as a financial market for short-term, highly liquid instruments. It then lists some key characteristics of money market instruments. The document proceeds to describe several types of popular money market instruments: Treasury bills, commercial paper, repurchase agreements, and banker's acceptances. It provides details on how Treasury bills are traded and the typical maturities of commercial paper, repurchase agreements, and banker's acceptances. The document concludes with a definition of the money market as a short-term market where liquidity and borrowing/lending occurs frequently, requiring constant awareness of changes.

1. Topic:
Money Market Instruments
Presented to: Miss Anam Imran
Presented by: Mateen Altaf
Class: MBA (B&F) 6th semester
Subject: Credit Management (8544)
mataltaf@hotmail.com
Allama Iqbal Open
University, Islamabad

2. Acknowledgment
First of all thanks to ALLAH, Who is most beneficent & the
most merciful, Whose blessings are abundant & favors are
unlimited.
It’s my pleasure to acknowledge the guidance and support of
my subject teacher Miss. “Anam Imran” for her endless
guidance.

3. Introduction
A segment of the financial market in which financial
instruments with high liquidity and very
short maturities are traded.
The money market is used by participants as a means for
borrowing and lending in the short term, from several
days to just under a year.

4.  Short term borrowing and lending
 Low credit risk
 High liquidity
 High volume of borrowing or lending
Characteristics of Money Market Instruments

5. T-bills are the Government debt securities that matures in
one year or less from their issue date.
A treasury bill differs from other types of investments in that
they do not pay interest in the traditional way. When an
investor wishes to purchase a treasury bill, he buys it at a
discount rate.
Money Market Instruments
1. Treasury Bills:
SBP use two methods to trade T-bills:
1. Auction System
2. Open Market operation

6.  Short-term, unsecured promissory notes issued by well-
known companies carrying high credit rating
 Used to meet immediate cash needs
 Maturity period is not more than 270 days
 SBP and SECP started process of creating commercial
paper market in Pakistan in 2003
2. Commercial Paper

7.  Repurchase agreements are agreements between a
borrower and a lender
 Borrower sells securities to the lender with the
stipulation that the securities will be repurchased on a
specified date and at a fixed price and interest
 These agreements are the most liquid of all money
market investments, ranging from 24 hours to several
months.
3. Repurchase Agreements:

8.  Acceptance means a vow to pay a definite amount
of money
 The person who will pay is called as the
promissory while the one who will receive is the
beneficiary
 The maturity of banker’s acceptance mostly range
to 30 to 180 days
4. Banker’s Acceptance:

9. Case Study
HBL was founded in 1941 and
currently headquartered in
Habib Bank Plaza, Karachi. It is
the largest bank of Pakistan. The
bank has a network of over 1500
branches and over 1000 ATM(S)
in Pakistan and 55 branches worldwide. It has a domestic market
share of over 40%. The products include Loans, credit cards,
Savings, Consumer Banking etc.

10. SWOT Analysis
Strength:
 A Great Place to Park Money
 Highly Liquid
Weakness:
 Opportunity Lost
 Expenses Can Take a Toll
Threats:
 Purchasing Power Can Suffer

11. The money market is the market where liquid and short-
term borrowing and lending take place. As the short-
term market for money, money changes hands in a short
time frame and the players in the market have to be alert
to changes, up to date with news and innovative with
strategies and products.
Conclusion