Indian Money Review, Indian Money Dot com - Features of Indian Money Market
Money Market is a Market for trading in short-term loans between banks and financial institutions. Participants in the money market borrow and lend for the short term.
The short-term instruments in the are inter-bank call money market, (91 days and 364 days), Certificates of Deposits, Commercial papers, Repurchase agreements and so on.
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Features of the Indian Money Market:
The RBI is highly impacted by the functioning of the Indian Money Market. Therefore, the efficiency of the Money Market is very important.
1. It is through the Money Market that surplus funds move to deficit areas. This helps in tackling temporary liquidity crisis in the country.
3. Government deficits are financed through the Money Market in a non-inflationary way.
That’s why you can say that Money Market is a ‘barometer’ of the Central Banking operations.
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