Money Market Instruments

This contrasts with the capital market for longer term funding which is supplied by bonds and equity.

Money market instruments. It facilitates the transactions for short term funds and maintains appropriate liquidity in the market. 90 180 and 360 days. Types of money market instruments money market funds. Money market is a part of a larger financial market which consists of numerous smaller sub markets like bill market acceptance market call money market etc.

Treasury bills t bills are short term notes issued by the u s. The financial markets meet longer term cash needs. Investors are drawn to short term money market instruments because of. Money market instruments maturities can last from one day to one year with three months or less being the most common.

Money market instruments are highly liquid in nature. They come in three different lengths to maturity. Besides the money market deals are not out in money cash but other instruments like trade bills government papers promissory notes etc. The period is overnight a few days weeks or even months but always less than a year.

The wholesale money market is limited to companies and financial institutions that lend and borrow in amounts ranging from 5 million to well. Money market trades in short term financial instruments commonly called paper. Banks non banking financial companies and acceptance houses make up the money market. Types of money market instruments.

The purpose of this market is to tend to short term cash needs rather than investing in the needs of various financial institutions. In addition money market instruments generally have the following two. The core of the money market consists of interbank lending banks borrowing and lending to each other using commercial paper repurchase agreements and similar instruments. The money market is a part of the larger financial market and consists of numerous smaller sub markets like bill market acceptance market call money market etc.

Money market deals are not carried out in money cash but other instruments like trade bills government papers promissory notes etc. Financial instruments with. Money market is a market for securities with short term maturities upto 1 year.