Preview

The Role of Money Market in the Econmi Growth of Nigeria

Satisfactory Essays
Open Document
Open Document
251 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Role of Money Market in the Econmi Growth of Nigeria
The financial markets are types of markets designed for the creation and disposition of financial assets. There are two sections of the financial markets in Nigeria, namely: money market and capital market (Central Bank of Nigeria-CBN, 2004; 2007). A financial asset is created when one party in exchange for cash issues a receipt of acknowledgement which entitles the holder a claim of pecuniary nature against future interests of the issuer. Financial assets fall into three general categories namely: a) Money – issued by the Central Bank of a country on behalf of the Government of the country as paper currency and coins; b) Debt – issued by corporate and Government units; and c) Shares – issued by companies. Investment that promotes liquidity and gives immediate income requires short-term funding and varies from few hours and one year. Capital market is a collection of institutions set up for the granting of medium and long term loans (Oloyede, 1999). Unlike the money market, it is a market for government securities, corporate bonds, the mobilization and utilization of long-term funds for development – the long term end of the financial system. One of the greatest achievements of the CBN since it was established in July, 1959 has been the gradual development of the financial system. The system consists primarily of the money market for short term lending and borrowing as well as capital market for long term funding. To Oloyede (1999) organized money market is a market for short-term investible fund where short

You May Also Find These Documents Helpful

  • Powerful Essays

    Fins1612 Notes

    • 17846 Words
    • 72 Pages

    The household and firms sectors can either be in surplus or deficit in terms of money. The ld financial sector’s purpose is to redistribute that money by taking surplus sector’s savings and lending that to the deficit sector. The financial sector makes money in this way by charging a sum for lending and also giving a small bonus to those that save. The financial sector is not in the middle of the diagram without reason. It is considered the lifeblood of the economy as it redistributes money to keep the flow of money goi The flow of going. money between sectors is what moves the economy. The Financial System The financial system’s function is to provide: • • • Investment products – such as shares and bank deposits. Risk management products – such…

    • 17846 Words
    • 72 Pages
    Powerful Essays
  • Good Essays

    Week 2 Study Questions

    • 562 Words
    • 3 Pages

    Money markets provide individuals with both lending and borrowing for a decided period of time; furthermore they involve short-term maturities. In contrast, capital markets protect long-term maturities, which significantly assist companies to increase required capital. Essentially money markets generate transactions possible using short-term financial means, while capital markets make transactions possible using long-term financial methods.…

    • 562 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    The story “The Black Cat” by Edgar Allan Poe is a story based on the phenomenon’s he’d do when he was intoxicated therefore not in his right mind. Not content with the multiple events that happened in his house, he was abashed nevertheless disgusted with himself. You’d never think he’d come to avail such a trait as a result of being an animal person with a kind heart. In his younger years he found a girl that shared the same bond as him with animals consequently he married her. One out of the abounding animals they had together was a black cat named Pluto, he wasn't like any other cat. Smart as well as eminently intelligent, always following him around everywhere he would come about. But one night he came home drunk and thought Pluto resisted…

    • 239 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets such as the money market). The…

    • 1645 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    Commercial banks are one of the three primary agents which help circulating funds in the market. Commercial banks provide loans and corporate bonds to the households, new start ups and small medium enterprises to run their businesses. It also obtains money from the households and invests that money to other profitable investments. The money held as customer account then accrues interest which is given to the customer in the form of periodic payments. The commercial banks play an important part of economy when they are involved in bidding process of government securities. Various services and products provided by commercial banks such as car leasing, mortgage financing, credit cards etc provide easy accessibility of funds to the customers. Hence great deal of money circulated in the economy is…

    • 387 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Money and Capital Markets

    • 1419 Words
    • 6 Pages

    Money and Capital Markets is an overview of the broad structure of the money markets…

    • 1419 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    ideology

    • 558 Words
    • 2 Pages

    An ideology is a system of ideas which attempts to explain reality. Ideologies are developed because reality is often too complex to be understood. They also reflect a biased point of view and serve the interests of a particular group. They are created by institutions such as church, state, school, etc. They tell people how to think, speak, feel or act. Ideologies tend either to over-simplify reality or to completely distort it. Ideologies sway people to think a certain way and in doing so they abolish uncertainty and doubt. Ideologies are a fairly modern phenomenon, related to the political and economic circumstances of the nineteenth and twentieth centuries. Ideologies try to constitute people’s goals, expectations, and actions; they establish a set of ideas proposed by the dominant class of a society to all members of the society to try to control them.…

    • 558 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    About Apple Company

    • 1062 Words
    • 5 Pages

    That market gap is an opportunity for Apple, too. For example, businesses have been using iPhones more frequently for their employees as the device has grown and expanded its features.…

    • 1062 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    The money market developed because there are parties that had surplus funds, while others needed cash. The money market is a sector of the financial market in which financial instruments with high liquidity and very short maturities are traded. Money market investments are also called cash investments. Money market trades can happen overnight, in a couple of short months or in less than a year. Money market trades in financial instruments commonly called "paper”, there are various instruments that exist such as Treasury bills, commercial paper, bankers ' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage, and asset-backed securities. This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity.…

    • 1297 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Business Journalism

    • 3178 Words
    • 13 Pages

    Capital Market is one of the significant aspect of every financial market. Hence it is necessary to study its correct meaning. Broadly speaking the capital market is a market for financial assets which have a long or indefinite maturity. Unlike money market instruments the capital market intruments become mature for the period above one year. It is an institutional arrangement to borrow and lend money for a longer period of time. It consists of financial institutions like IDBI, ICICI, UTI, LIC, etc. These institutions play the role of lenders in the capital market. Business units and corporate are the borrowers in the capital market. Capital market involves various instruments which can be used for financial transactions. Capital market provides long term debt and equity finance for the government and the corporate sector. Capital market can be classified into primary and secondary markets. The primary market is a market for new shares, where as in the secondary market the existing securities are traded. Capital market institutions provide rupee loans, foreign exchange loans, consultancy services and underwriting.…

    • 3178 Words
    • 13 Pages
    Good Essays
  • Good Essays

    Money Market

    • 986 Words
    • 4 Pages

    The Indian money market consists of diverse sub-markets, each dealing in a particular type of short-term credit. The money market fulfills the borrowing and investment requirements of providers and users of short-term funds, and balances the demand for and supply of short-term funds by providing an equilibrium mechanism. It also serves as a focal point for the Central Bank's intervention in the market.…

    • 986 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Money Market

    • 1215 Words
    • 5 Pages

    The money markets consist of a network of corporations, financial institutions, investors and governments, which need to borrow or invest short- term capital (up to 12 months). For example, a business or government that needs cash for a few weeks only can use the money market. So can a bank that wants to invest money that depositors could withdraw at any time. Through the money markets, borrowers can find short- term liquidity by turning assets into cash. They can also deal with irregular cash flows- in-comings and out-goings of money- more cheaply than borrowing from a commercial bank. Similarly, investors can make short- term deposits with investment companies at competitive interest rates: higher ones than they would get from a bank. Borrowers and lenders in the money markets use banks and investments such as stocks, bonds, short- term loans and debts, rather than lending money. In brief, the money market is a short term debt market that deals with different money market instruments.…

    • 1215 Words
    • 5 Pages
    Better Essays
  • Good Essays

    assign

    • 1566 Words
    • 7 Pages

    A money market is a market for borrowing and lending of short-term funds. It deals in funds and financial instruments having a maturity period of one day to one year. It is a mechanism through which short-term funds are loaned or borrowed and through which a large part of financial transactions of a particular country or of the world are cleared.…

    • 1566 Words
    • 7 Pages
    Good Essays
  • Good Essays

    Money Market

    • 8055 Words
    • 37 Pages

    HE existence of money market facilitates trading in shortterm debt instruments to meet short term needs of large…

    • 8055 Words
    • 37 Pages
    Good Essays
  • Satisfactory Essays

    money Market

    • 403 Words
    • 2 Pages

    Money Market an integral part of the financial market of a country. It provides a medium for the redistribution of short-term loanable funds among `financial institutions, which perform this function by selling deposits of various types, certificate of deposits and discounting of bills, treasubillry s etc. The participants in the money market are: the central bank, commercial banks, the government, finance companies, contractual saving institutions like the pension funds, insurance companies, savings and loan associations etc. The instruments that are generally traded in the money market constitute: treasury bills, short-term central bank and government bonds, negotiable certificates of deposits, bankers acceptances and commercial papers like the bills of exchange and promissory notes, mutual funds etc.…

    • 403 Words
    • 2 Pages
    Satisfactory Essays

Related Topics