What are the main money markets in India?
5 Main Instruments of Money Market in India
- Treasury Bills: Treasury bills, also known as Zero Coupon Bonds are the instrument of short term borrowing with maturity period of less than one year.
- Commercial Paper:
- Call Money:
- Certificate of Deposit:
- Commercial Bills:
How does money market work in India?
Money market mutual funds invest in securities that have a maturity of around one year. Hence investors use it to manage short-term cash needs. The fund invests in certificate of deposits, commercial papers, treasury bills, and repurchase agreements. The investments are generally in fixed income generating securities.
What is the value of money market in India?
|Money Market Rate||02 Sep 2021||3.35|
|Stock Market Index||02 Sep 2021||57,852|
|Average Long-term Government Bond||01 Sep 2021||3.62|
|Treasury Bills (over 31 days)||01 Sep 2021||3.42|
Who regulates money market in India?
The Reserve Bank
The Reserve Bank derives statutory powers to regulate market segments from specific provisions of the Reserve Bank of India Act, 1934. The prudential guidelines issued to eligible market participants form the broad regulatory framework for Government securities, money market and interest rate derivatives.
What is the main problem of money market?
Shortage of funds: Money market faces a shortage of funds due to inadequate savings. The low per capita income (PCI), poor banking habits among the people, indulgence in wasteful consumption, inadequate banking facilities in the rural areas, etc. have also been responsible for the paucity of funds in the money market.
What are the examples of money market?
Examples of Money Market Instrument
- Banker’s Acceptance.
- Treasury Bills.
- Repurchase Agreements.
- Certificate of Deposits.
- Commercial Papers.
Who controls the money market?
Central banks work hard to ensure that a nation’s economy remains healthy. One way central banks accomplish this aim is by controlling the amount of money circulating in the economy.
What is maximum period of money market?
Under call money market, funds are transacted on an overnight basis and under notice money market, funds are transacted for a period between 2 days and 14 days….Master Circular on Call/Notice Money Market Operations.
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What are the types of money market?
The money market is composed of several types of securities including short-term Treasuries (e.g. T-bills), certificates of deposit (CDs), commercial paper, repurchase agreements (repos), and money market mutual funds that invest in these instruments.