'Money market' is a short-teerm credit market and essencial feature is the dealing in assets of relative liquidity suh as treasury bills, bill of exchange,short term government securities etc.It meets short-term requirements of borrower and provides liquidity or cash to the lenders.In the another view,Money market is the global financial market for short-term borrowing and lending. It provides short-term liquidity funding for the global financial system. The money market is where short-term obligations such as Treasury bills, commercial paper and bankers.
The fundamental difference between 'capital market' and 'money market' is : capital market is for dealing in long term fund and money market is for dealing in short term funds.By money market,we must understand that it has no location where borrowers and lenders comes together.Banks and Finance companies have some terms for example eligible assets include auto loans, credit card receivables, residential/commercial mortgage loans, mortgage-backed securities and similar financial assets.
Money market in essence, promote economic growth of country.Central bank often plays through the short-term money market in influencing the cost and demand availability and supply of money.Certain large corporations with strong credit ratings, such as General Electric, issue commercial paper on their own credit. Other large corporations arrange for banks to issue commercial paper on their behalf via commercial paper lines.
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