Money-Market-ppt

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Money Market

Club Activity
Submitted To Submitted By
Dr Meenakshi Jaiswal Vipul Mishra
Assistanat Professor MBA 2023-25
MONEY MARKET
Money Market is a market for
 overnight to short-term funds (i.e., upto 1
year) &
 for short-term money and financial assets
 that are close substitutes for money,
 that is, financial assets that can be quickly
converted into cash (money)
 with minimum transaction cost and

 without loss in value.


Importance of Money Market
1. Development of Trade and Industry
2. Development of Capital Market
3. Smooth Functioning of Commercial
Banks
4. Effective Central Bank Control
5. Formulation of Suitable Monetary
Policy
6. Non-inflationary source of Finance
to Government
Characteristics of Money Market
A collection of markets for several
short-term debt instruments

 Wholesale market

 Principal feature is honour

 Need-based market
Features of a Money Market
The following are the general features of a
money market:

1. It is a market purely for short-term funds or


financial assets called near money.

2. It deals with financial assets having a maturity


period upto one year only.

3. It deals with only those assets which can be


converted into cash readily without loss and
with minimum transaction cost.
Features of a Money Market (cont.)

4. Generally transactions take place through


phone i.e., oral communication. Relevant
document and written communications
can be exchanged subsequently. There is
no formal place like stock exchange as in
the case of a capital market.

5. Transactions have to be conducted


without the help of brokers.
Features of a Money Market (cont.)

6. It is not a single homogeneous market. It


comprises of several sub-markets, each
specializing in a particular type of financing
e.g., Call money market, Acceptance market,
Bill market and so on.

7. The components of a money market are the


Central Bank, Commercial Banks, Non-
banking financial companies, discount
houses and acceptance houses. Commercial
banks generally play a dominant role in this
market.
Objectives of Money Market
The following are the important objectives of a
money market:

i. To provide a parking place to employ short-


term surplus funds.
ii. To provide room for overcoming short-term
deficits.
iii. To enable the Central Bank to influence and
regulate liquidity in the economy through its
intervention in this market.
iv. To provide a reasonable access to user of
short-term funds to meet their requirements
quickly, adequately and at reasonable costs.
Functions of Money Market
To provide

 A balancing mechanism

 The focal point for central bank

 An intervention

 Reasonable access to short-term funds


Money Market Instruments/
Products
1. Treasury Bills (T-Bills)

2. Commercial Papers (CPs)

3. Commercial Bills (CBs)

4. Certificates Of Deposit (CDs)

5. Call/Notice Money Market

6. Collateralised Borrowing And Lending


Obligation (CBLO)

7. Money Market Mutual Funds (MMMFs)


Money Market Derivatives

 Interest Rate Swap

 Forward Rate Swap

 Interest Rate Futures


• HDFC
• Infosys
• Titan
• Reliance
• TCS
• Tata Motors
My Investment
1. Understand your Risk profile and Investment Goals.

2. Trading or Investing.

3. Shares or Mutual Funds.

4. Choose Stocks of Established Companies.

5. Start Analyzing Yourself.

6. Avoid Derivatives.

7. Don't Make Decisions Emotionally.

8. Understand the Stock Markets.


THANK YOU

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