Beruflich Dokumente
Kultur Dokumente
MONEY MARKET
Chapter Objectives
To understand
Wholesale market
Need-based market
Features of a Money
Market
The following are the general features of a money
market:
A balancing mechanism
An intervention
Ensure liquidity
Features of T-bills
Ad hoc bills
Auctioned T-bills
91-day, 182-day, and 364-day T-Bills
Sale of T-bills
Types of auctions
Issuers
Creditworthy Corporates
Primary Dealers
All India Financial Institutions
2. Commercial Paper
(cont.)
Flexible Maturities,
Lower Cost,
Higher Credit Standing,
High Liquidity,
CP issue to be rated
Structural factors
Through repos
Price stability
Growth
Instruments used to
influence monetary
conditions
Direct instruments Indirect
such as instruments such
as
Reserve Requirements,
Open Market
Limits On Refinance, Operation
Administrative Interest Repos
Rates,
Qualitative And
Quantitative
Restrictions On Credit
Tools for Managing Liquidity in
the Money Market
Interest rates
Prime lending rate:10 .25% -10 .75%
Bank rate :6%(Long-term rate)
Interbank repos,
RBI repos:
Reverse Repo (Borrowing of overnight
funds by RBI)- rate 6% and