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The Money Market

 

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The money market is a general term for the markets in which banks lend to and borrow from each other, or trade financial instruments such as Certificates of Deposit (CDs). The market normally trades in maturities up to one year. It provides short to medium term liquidity in the global financial system. Derivatives of the money market include forward rate agreements (FRAs) and futures.

Trading takes place between banks in the "money centres" (New York and London primarily, also Chicago, Frankfurt, Singapore, Hong Kong, Tokyo, Toronto, Sydney).

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