Secondary Market: A market for buying and selling securities in the period between their issue and maturity.Primary Market: The market in which new issues of financial instruments/ securities are sold initially.Offer: Offer rate is the rate that a bank will want to receive on any lending it makes.Bid: A bid rate is the rate that a bank will wish to pay on any borrowing it makes.Interbank market: A market for wholesale loans and deposits traded between banks.Over The Counter (OTC): A secondary market in which dealers at different locations who have an inventory of securities stand ready to buy and sell securities “ over the counter ” to anyone who comes to them and is willing to accept their prices.Delivery Versus Payment (DVP) : Clearing and settlement of transactions in money market instruments (MMIs) is through book-entry system of transferring ownership with delivery of the securities against payment i.e.It is a form of clean borrowing / lending in the MM for short term requirements without collateral. The money can be “called” (withdrawn) at any time. Call Money: Funds placed with a financial institution without a fixed maturity date.Overnight Money Market Repo Rate: The rate at which overnight repo deals are transacted in the money market.Provider of funds does Reverse Repo transaction. It is the mirror image of a Repo transaction. Reverse Repurchase/ Reverse Repo: A Reverse Repurchase is an agreement to purchase and resale of a security at a specific price and a specific future date.Basically a repurchase agreement is a collateralized loan, where the collateral is a security. Repurchase/ Repo: A repurchase agreement is the sale of a security with a commitment by the seller to buy the security back from the purchaser at a specified price at a designated future date.MM is for transactions in wholesale short term loans and deposits and for trading short term financial instruments. Money Market: Money Market is a financial market in which only short-term debt instruments (maturity less than one year) are traded.Developed financial markets can play a key role of intermediating between the lenders (savers) and the borrowers (investors), reduce information asymmetries and allow central banks to implement and achieve objectives of monetary and exchange rate policies Markets for trading financial instruments including money, bonds, stocks, and derivative are referred to as Financial Markets.
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