Money Markets

Are also known as discount markets or acceptance financial institutions. This is a market for short term funds maturing in one year. Money market works through financial institutions. It facilitates transfer of capital between savers and users. The transfer can be direct (from saver to investor) and indirectly through an intermediary). Foreign exchange market is also part of money market. The
money market or discount market is the market for short term loans.

Financial Instruments in Money market include:
1. Commercial paper
2. Treasury bills
3. Bills of exchange
4. Promissory notes
5. Bank overdrafts
6. Bankers certificate of deposit

These instruments are sold by commercial banks, merchant banks, discounting houses, acceptance houses, and government.

(Visited 120 times, 1 visits today)
Share this:

Written by