The Money Market

Hours ago, the @LeoFinance announced the developments surrounding WLEO, bringing to notice the relaunch of WLEO and the refunding of the stolen assets. Ever since the hack incidence, WLEO was being halted and I'm glad that it's coming live again. This is good news for me and most like, going to affect the price of LEO in the market. I will not also fail to commend the founding team for their relentless efforts in growing this community and project as well the detailed announcement. Read full announcement here

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Away from that, I'll love to discuss briefly on the concepts of the Money Market.

What is Money Market? The money market is simply a market where market instruments are being bought and sold. In addition, it is a market where short-term securities are being traded. From this, it won't be wrong to say that Leodex and Hive-engine is a money market because both meet these conditions. But the money market is not exactly the large market squares rather it is just administrative and commercial arrangements or framework for the buying and selling of short-term securities.

The money market is specifically of utmost importance to the government and other institutions in need of short-term funds and for suppliers of short-term funds who because of the nature of their liabilities need part of their assets in relatively liquid form.

Bearing in mind the liquidity of the financial instruments traded in this market and its implications for the volume of credit in the economy, monetary authorities exert much influence on activities in the market as a means of meeting governments financial requirements and to regulate money supply. The money market has various other objectives.

In Nigeria, money market operations began in 1960 according to studies. It started with the issue of Treasury Bills worth eight million Naira (N8,000,000) by the Central Bank of Nigeria. And by the same year ending, outstanding Treasury Bills amounted to eighteen million Naira N18,000,000).

The Nigeria money market was being established with a few aims like; meeting the temporary financial needs of the government; that is, providing 'ways and means' instrument. Secondly, to stem the repatriation of short-term funds into the London Money Market by creating domestic outlets for investment of short-term funds in Nigeria.

The market was also established so as to lay a sound foundation for efficient regulation of the monetary and banking systems. Lastly, its aim was also to provide for the banks the basic financial instruments for effective management of their resources.

The principal participants in this money market are the commercial banks. This is because most of the instruments traded in the market qualify as liquid assets for the purposes of meeting liquidity requirements. It should also be noted that securities provide commercial banks with the outlet for investing part of their cash assets in income-bearing assets. Other players in the Money market include the likes of the Central Bank, governments, statutory corporations and other financial institutions.