Explanation:

Money Market is the short-term financial market of an economy. In this market, basically, money is traded between individuals or groups (i.e., financial institutions, banks, government, companies, etc.) who are either cash-surplus or cash-scarce. The trading is done at a rate known as discount rate which is determined by the market and guided by the availability of and demand for the cash in the day-to-day trading10. The ‘repo rate’ of the time (announced by the RBI) works as the guiding rate for the current ‘discount rate’. Borrowings in this market may or may not be supported by collaterals. In money markets, the financial assets which have quick conversion quality into money and carry minimal transaction cost are also traded11. Money market may be defined as a market where short-term lending and borrowing takes place between the cash-surplus and cash-scarce sides.