Basics Of Money Market
The short-term financial asset or loans are dealt with in the money market. It is the market wherein one can borrow or lend the short-term funds. The short-term instruments or the assets can be easily converted to cash without any loss and it incurs very less transaction cost. All the short term requirements of the money of the borrowers can be met with the help of this market and offers liquidity to the lenders.
Even though the cryptocurrency market one can easily earn some money to meet their short-term expenses. It is a new and upcoming market where you could trade in digital currency like bitcoin, litecoin, etc to earn a profit. The trading transactions can be done through different software’s available in the market like crypto soft. You can view the crypt soft review to understand how this software works and helps you to earn money quickly.
Features of the money market
- It is the market only for financial assets or short-term funds that are called as near money.
- It only deals with those financial assets which have a maturity period of less than one year.
- Generally, the transactions are conducted through oral communication or phone. Written and relevant documents could be subsequently exchanged. There will be no formal place such as stock exchange as it is there in case of the capital
- All the transactions need to be conducted using the help of the brokers
- Components of this market are commercial banks, the central bank, discount houses, non-banking financial institutions, and acceptance house. In this market, the commercial banks normally play a dominant role.
Objectives of the money market
Below mentioned are the few critical objectives of this market.
- To offer a place to employ the short-term funds that are in surplus
- It helps in overcoming the short-term deficits
- It enables the central bank to regulate and influence the liquidity in an economy through the market intervention
- It provides an easy access to funds to all the users who are in need of short-term funds adequately, quickly and also at reasonable costs.
It offers safety to the investors as the money gets invested in low- risk, short-term duration securities. The investors who are not into a high level of risk tolerance and can choose this market to invest their fund. It is guaranteed that it will give you a good return and need not worry about any loss.