Money market refers to a segment of the financial market where short-term borrowing and lending of funds occur.

t is a marketplace where highly liquid and low-risk financial instruments with short maturities are traded. The purpose of the money market is to facilitate the smooth functioning of the economy by providing a means for institutions and individuals to manage their short-term cash needs.

In the money market, participants engage in transactions involving instruments such as Treasury bills, commercial paper, certificates of deposit, repurchase agreements (repos), and short-term government securities. These instruments are typically considered to be low-risk and highly liquid, meaning they can be easily bought and sold with minimal impact on their market value.

« Back to Glossary Index