What is Money Market?
Meaning and Concept of Money Market
The money market is a market for short term loans, i.e. less than one year. The very name, in fact, suggest that it is money that is being bought and sold. Business firms used it for the purchase of inventory, the sales Finance Companies use it to finance as consumer credit, the banks used to finance temporary reserve shortages and the government uses it to bridge the gap between tax receipts and expenditure (in other words, for deficit financing). A noteworthy the point is that in the money market we did not in money but near money assets.
The money market is not a place but an activity, the transactions are carried out by telephone, mail, etc. Among people who may have never made one another. Almost all big cities have local money markets, say in Bombay there is the Bombay money market, in New York, there is the New York money market and in London there is the London Money market.