Concept of Money Market
Money marketplace is a marketplace for brusk term funds. Short term funds are funds which tin last used overnight to one-year duration. By using the discussion marketplace nosotros produce non hateful a physically located place, where buyers together with sellers run into expression upward to expression upward inwards unopen proximity. Market refers to the institutional structures which facilitate transactions betwixt those who need / remove brusk term funds, together with those who provide / provide them. These are the buyers together with sellers of short-term funds. Thus the ‘Money Market’ is an Money marketplace is the collective to the diverse firms together with institutions that bargain inwards the diverse grades of close money. Transactions inwards the coin marketplace betwixt the borrowers, lenders together with middlemen takes house through telephone, telegraph, mail, agents, inwards improver to expression upward transactions“. Although coin markets are non confined to locations, they are really ofttimes refereed to inwards relation to prominent places for identification for eg : London coin market, novel York Money Market, Mumbai Money Market together with and thence on. London together with New York Money Markets attract funds from all over the world. Mumbai coin marketplace is the centre for short-term funds non exclusively for Bombay, but the whole India.
organization that brings close a straight or an indirect contact betwixt the lender rand the borrower. Short term funds include cash together with close coin assets. Near coin assets are those which are semi-liquid assets which tin last converted into cash without loss of fourth dimension or value. To quote Crowther, “
Objects of the Money Market
The basic objectives of coin markets are
- To provide institutional frame piece of occupation to employ short-term surplus funds.
- To facilitate current of funds to where in that location is a deficit.
- To enable the Central banking concern to influence together with regulate liquidity inwards the economic scheme through coin marketplace interventions. Central Banks everywhere do varying degrees of command over institutions of the coin market.
Features of the Money Market
The next are the full general features of a coin market
- It is a marketplace for short-term funds or fiscal assets called close money.
- It deals amongst fiscal assets which direct maintain a maturity catamenia upto 1 twelvemonth only.
- It deals amongst exclusively those assets which tin last converted into cash readily without loss together with minimum transaction cost.
- Transactions are conducted without the help of others.
- It is non a unmarried homogenous market. It consists of several sub markets, each dealing inside a detail type of financing. Eg. Call coin market, Acceptance market, Bill marketplace etc.
- Transactions inwards the marketplace are through oral communication, supplemented through documents together with written communication.
- Institutions of the coin marketplace to a greater extent than ofttimes than non are, the Central Banks, Commercial Banks, Discount houses together with Acceptance houses, Commercial banks play a primal role inwards the coin marketplace of whatever country.
Read to a greater extent than close Indian Money Markets from here
Read Defects of Indian Money Markets from hither