What is The Money Market

What is the money market, The Money market is that segment of the financial market which refers to all transaction in near money such as short term claims on financial intermediaries, agriculture, consumers cooperate sector it may be defined as the center for dealing in monetary assets? It meets the short term requirement of borrowers and provides liquidity or cash to the lenders in this market short term surplus funds at the disposal of financial and other institutions and individual and also by the government It provides a mechanism for the quick and dependable transfer of short term funds In simple words, it is that market wherein money or claims on money is borrowed and loaned for short term funds in simple words it is that market wherein money claims on money is borrowed and loaned for a short period of time. So the money market is a center in which financial institutions congregate for the purpose of dealing impersonally in the monetary assets. Thus we may call the money market a reservoir of short-term funds refer to relatively liquid assets i.e. which can be converted into cash without much loss An asset is termed as the short term which has a maturity period of one year or less. Transaction on money market may be for a period of even one day or fifteen days a month and so on but less than one years i.e. 365 days 

Money markets may serve a particular region 

Money markets may have no geographical constraints but many such markets may serve a particular region This region may be one part of a country or have an international shade. Like New York is an international money market whereas New Delhi is a regional Indian money market There may be various centers of money market, these may not be a separate independent market but are interlinked and related.

The price for financial asset traded on this market is referred to as the interest rate paid 

The price for financial asset traded on this market is referred to as the interest rate paid for the specific period The central bank occupies a strategic position in the money market especially when the money market is not the international level it is the money market through which the central bank comes in contact with the financial sector of the economy as a whole and it is by varying the liquidity in the market and thereby influencing the cost and availability of credit.