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FEATURES OF MONEY MARKET

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(i) It is a wholesale market and involves heavy transactions which are settled on daily basis.

(ii) It is a market for fulfillment of short term liquidity requirements of market participants.

(iii) Govt. of India, RBI, Banks & other financial institutions are the key players of this market.

(iv) It transacts the large size of Financial Instruments.

(v) There are a large number of participants in the money market.

(vi) The RBI occupies a strategic position in the money market.

(vii) Money market provides balancing mechanism for short – term surpluses and deficiencies. 

It provides:
(i) A balancing mechanism for short term surpluses and deficiencies.

(ii) a focal point of central bank intervention for influencing liquidity in the economy; and

(iii) A reasonable access to the users of short term funds to meet their requirements at realistic or reasonable price or cost. 

Note: This market is safe for borrowers and lenders because only persons of high standing are permitted by the RBI to enter into this market.

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