money-market

A financial analyst reviews a money-market chart on her computer screen.

Definition

1. Noun (countable, often singular):
   • A financial market: "money market" refers to the sector of the financial system where short-term borrowing, lending, buying, and selling of highly liquid assets (such as treasury bills, commercial paper, and certificates of deposit) occurs. It is distinct from the capital market, which deals with long-term securities.
   • A specific institution or system: The "money market" can also denote the collective network of banks, dealers, and brokers that facilitate these short-term transactions.

Usage Examples

• (A financial market for short-term, low-risk instruments.)
• (The central bank adjusts short-term liquidity in the banking system.)
• (A mutual fund that invests in short-term debt securities.)

Advanced Usage

• "money-market account": a type of savings account offered by banks that typically pays higher interest than a standard savings account but may require a higher minimum balance.
  • He opened a money-market account to earn better interest on his emergency fund. (A savings account linked to money-market instruments.)
• "money-market rate": the interest rate paid on short-term loans or deposits in the money market.
  • The money-market rate fluctuates daily based on supply and demand for cash. (The short-term interest rate in the interbank lending market.)

Variants and Related Words

• Money-market fund (n): a type of mutual fund that invests exclusively in short-term, high-quality debt instruments.
  • The money-market fund offers daily liquidity and low risk. (A fund investing in money-market securities.)
• Money-market instrument (n): a specific short-term debt security, such as a Treasury bill or commercial paper.
  • Treasury bills are a common money-market instrument. (A short-term financial asset traded in the money market.)

Synonyms

• Short-term capital market: a market for short-term borrowing and lending.
• Cash market: a market where financial instruments are traded for immediate delivery (often used interchangeably with money market in some contexts).

Related Idioms

• "Play the money market": to engage in short-term trading or investment in money-market instruments.
  • He tried to play the money market but lacked the expertise. (He speculated in short-term financial instruments.)
• "Money-market squeeze": a situation where liquidity in the money market becomes tight, causing interest rates to rise.
  • The central bank intervened to ease the money-market squeeze. (A period of reduced short-term credit availability.)