The money market is where the funds are bought and sold securities in the form of short-term (less than 1 year). As examples of securities include: call money (the loan at any time, usually futures few days only), Bank Indonesia Certificates (SBI), a promissory note / acceptors and trade notes issued by banks or other nonbank financial institutions. Form of money market organized by Bank Indonesia is the “interbank money market”, this is a container that serves to channel the needs of official funds or excess funds from the banking world to the parties that require a simple, fast, and effective and organized.
The function of money markets, among others:
a. As an intermediary in trading securities are short-term.
b. As a collector of funds in the form of securities, short-term.
c. As a source of financing for companies to invest.
d. As a guarantor in the issuance of short-term securities.
e. As intermediaries for foreign investors in disbursing short-term loans to companies in Indonesia.
f. Help finance the company’s working capital by buying securities of short-term (bill of exchange, promissory notes, etc.).
g. As a collector of funds in the form of excess cash from the bank or company that while not in use.
Benefits of money markets, among others:
a. The requirement for short-term credit to finance working capital needs of companies, such as basic materials, or materials for a smooth production process.
b. Can be productively channeling the funds in the form of cash temporarily (short term) has not been used.
c. Employment and increase incomes.
d. Fulfillment of goods and services for the community.
e. Spur economic development success.
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