MONEY MARKET

INTRODUCTION
Money Market refers to trading in very
short-term debt investment. At the
wholesale level, it involves large-volume
trades between institutions and traders.
At the retail level, it includes money
market mutual funds bought by
individual investors.
 ROLE
We keep hearing how money market
show the first sign of change when a
currency gains or loses value. This is
because it deals in short-term
instruments that are close substitutes
for money. These short-term instrument
are easily marketable.
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Since the holding time is less than a year,
the returns you receive are quick ,
unlike traditional instruments that have
long maturity time. In reality, money
market isn’t really a market, it is
rather a collective name given to the
various instruments and institution.
 PARTICIPANTS
 Central Government : Central
Government is a borrower in the money
market through the issue of Treasury
Bills(T-Bills).
 Public Sector Undertaking : Many
government companies have their
shares listed on stock exchanges.
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 Insurance Companies : Both general
and life insurance companies are usual
lenders in the money market.
 Banks : Scheduled commercial banks
are very big borrowers and lenders in
the money market. They borrow and
lend in call money market.