What are the major money market instruments in Pakistan?

What are the major money market instruments in Pakistan?

Following are the types of Money Market Instruments:

  • Promissory Note: A promissory note is one of the earliest type of bills.
  • Bills of exchange or commercial bills.
  • Treasury Bills (T-Bills)
  • Call and Notice Money.
  • Inter-bank Term Market.
  • Commercial Papers (CPs)
  • Certificate of Deposits ( CD’s )
  • Banker’s Acceptance (BA)

What are the instruments traded in money market?

Some of the instruments traded in the money market include Treasury bills, certificates of deposit, commercial paper, federal funds, bills of exchange, and short-term mortgage-backed securities.

What is money market instrument in Pakistan?

Money Market: Money Market is a financial market in which only short-term debt instruments (maturity less than one year) are traded. MM is for transactions in wholesale short term loans and deposits and for trading short term financial instruments. Major players in the money market are: Central Bank And Government.

What is treasuring bill?

Treasury bills are short-term sovereign debt securities maturing in one year or less. They are sold at a discount and redeemed at par. These bills are by nature, the most liquid money market securities and are backed by the guarantee of the Federal Government of a nation.

Which of the following is an example of a money market instrument?

Treasury bills, federal agency notes, certificates of deposit (CDs), eurodollar deposits, commercial paper, bankers’ acceptances, and repurchase agreements are examples of instruments.

What do you mean by money market instruments?

Money market instruments are debt securities that generally give the owner the unconditional right to receive a stated, fixed sum of money on a specified date. These instruments usually are traded, at a discount, in organized markets; the discount is dependent upon the interest rate and the time remaining to maturity.

What is the role of financial market in Pakistan?

The key financial markets of Pakistan are bond market, money market and equity market. Whenever the interest rate in an economy is high, the demand for Treasury bills fall and consequently its prices fall as well. This is why, the Treasury bill rates at the end of 2001 were on its way towards decline.

What is the difference between money market instruments and capital market instruments?

A money market is a component of financial market where short-term borrowing can be issued. This market includes assets that deal with short-term borrowing, lending, buying and selling. A capital market is a component of a financial market that allows long-term trading of debt and equity-backed securities.

Who can buy T-bills?

Government treasury bills can be procured by individuals at a discount to the face value of the security and are redeemed at their nominal value, thereby allowing investors to pocket the difference. For example, a 91-day treasury bill with a face value of Rs. 120 can be bought at a discounted price of Rs.