Define Money Market And Features Of Money Market?
According to Crowther, “Money market is a collective name given to various firms and institutions that deal in the various grades of near money”. Features of Money Market: • Money market is concerned with the borrowing and lending of short-term funds only. • For the borrowing and lending funds, it is not necessary that the borrower and the lender should meet each other face to face at a particular place. They can carry on negotiations and effect their financial transactions through telephone, telegram, mail or any other means of communication. • A money market is not a single homogeneous market. It is composed of several specialized sub-markets, such as call market, treasury bill market, discount market, collateral loan market, etc. • As in any other market, in the money market also, there is a price for the money borrowed and lent. That price is called interest. • There are a large number of borrowers and lenders in the money market. • A large volume of short-term funds is traded in money market. • Money market is the source of working capital finance. It is the major of working capital finance.
