Скачать или смотреть Financial Services - Lecture 8 (Functions of money market - BBA, SEM 3)

Functions of money market
1. It facilitates economic development through provision of short term funds to industrial and other sectors.
2. It provides a mechanism to achieve equilibrium between demand and supply of short-term funds.
3. It facilitates effective implementation of RBIs monetary policy.
4. It provides ample avenues for short-term funds with fair returns to investors.
5. It instills financial discipline in commercial banks.
6. It provides funds to meet short-term needs.
7. It enhances capital formation through savings and investment.
8. Short-term allocation of funds is made possible through inter-banking transactions and money market instruments.
9. It helps employment generation.
10. It provides funds to government to meet its deficits.
11. It helps to control inflation.
12. It provides a stable source of funds to banks in addition to deposits, allowing alternative financing structures and competition.
13. It encourages the development of non bank intermediaries thus increasing the competition for funds.
14. Savers get a wide range of savings instruments to select from and invest their savings.