Money market: Money market is a mechanism through which short term
funds are loaned and borrowed and through which a large part of financial
transactions of a particular country or of the world are cleared. A money
market includes only dealings in more or less standardized types of
investments/loans, such as, call investments/loans and in investment/credit
instruments, such as acceptance of treasury bills. Money market is distinct
from, but supplementary to the commercial banking system. It meets the short
term requirements of borrowers and provides liquidity to the lenders. Normally
money market deals with the transaction of maximum period of one year. The
Central Bank occupies a strategic position in the money market.
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