7 money market trends that show the Money Market is changing post the pandemic
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Introduction to and meaning of money market
For those interested in undergoing money market training, let us first understand what the term money market means.
In common parlance, a money market is defined as a marketplace where you can conduct trading of short-term financial assets. Generally, the maturity period of these assets is up to a year. Hence, you can relate that it has high liquidity. Two of the most important features in which the money market thrives are - the short maturity of assets and the scope of high liquidity.
The money market is made up of the following - acceptance houses, non-banking financial institutions, and commercial banks. The assets traded in the market are recognized as a very close substitute for money. The transactions must be carried out via written or oral communication or require formal documentation.
What are the instruments involved in the money market?
The money market can help your businesses, besides the banks and the government, fulfill their short-term capital requirements at a minimal cost. They fulfill the basic purpose of both the borrowers and the lenders, viz, short-term funding and ease in liquidity.
The below-mentioned instruments form part of the money market:
- Trade and treasury bills - issued by the Central Government at a discount for a period between 14 and 365 days.
- Certificate of deposits - Issued through a promissory note which commercial banks except for a period between 3 months to a year
- Commercial papers - Generally issued by corporates to meet short-term working capital requirements
- Promissory notes - A written promise given by one party to another party to make a payment on-demand at a future date
Features of the money market instruments
- Safety - The issuers have a decent history of lending money backed by a strong credit rating. It helps to signify that the instruments issued will be safe.
- High liquidity - These have a maturity period of less than a year, so it is considered highly liquid.
- Discounted price - The instruments are generally issued at a discount on the original face value. Financial planning and analysis skills are necessary to work around them and compare trends.
All about the money market trends
- The money market has eased financing requirements for borrowers.
- The central bank's monetary policies can be effectively implemented in an economy where the money market is well-developed.
- A developed money market helps the central banks control an economy's industry and commerce.
- When the commerce of an economy is well-developed, you can carry out your business better.
- Since the pandemic, the money market has greatly contributed to finding the right equilibrium between the supply and demand forces.
- It helps to allocate savings funds into the right investment channels, which you can do with the help of financial planning and analysis.
- Since the funds used in the money market are cash equivalents, it is easier to transfer the funds from one sector to another. In simple terms, it encourages financial mobility.
Money market training is advisable to understand how the system works deeper and develop financial planning and analysis skills. Anyone who wishes to learn how the system’s flow is maintained must have a good hand at financial planning and analysis. It is said that good financial planning and analysis help in faster and better decision-making. Whether designing an economy’s monetary policies or targeting the capital market’s development, financial planning and analysis are must-have skills.
Decoding - How to become an investment banker?
As we have discussed the importance of financial planning and analysis skills, this brings us to the subject of investment banking. As investment banks bridge the gap between companies (requiring funds for expansion) and investors (potential investors having money to invest), becoming an investment banker is smart. It not only provides you with exposure but also equips you with an all-around experience.
We have you covered if you are wondering how to become an investment banker. For starters, you can enrol in an investment banking course and learn the basics of the topic therein. The road is right before you for those wondering how to become an investment banker. You need not worry about becoming an investment banker, as the course will equip you with the right set of knowledge and skills desired in the role. The investment banking arena is a dream place to be in as it helps you deal with the money market and capital market instruments day in and out.
The program will help set a foundation, and you can kickstart your investment banking journey smoothly. The course also shares interview preparation guides to get you job-ready. It ensures you are ready for a range of job profiles like - money market analyst, capital market operations consultant, financial market advisor, etc.
You will be given real-life business cases and complex situations which will propel your transition from a learner to a market expert. You will be a part of a platform filled with industry leaders where you can learn from their real-time industry experiences. You can visit our website or contact us through chat support or drive to our training centers in Mumbai, Thane, Pune, Chennai, Bengaluru, Delhi, and Gurgaon.