chapter 9

Money Market: The FX Impact

LEARNING OBJECTIVES

In this chapter, an attempt has been made to give readers an overview of money market terminologies and instruments which are used for borrowing and lending for short tenors, i.e., up to one year and the interlinkage between money market and currency market. The short-term funding market and liquidity situation have become important factors in determining the direction of foreign exchange markets. The ongoing financial market crisis, comprising of sovereigns and financial institutions among others, has brought liquidity and money market health at the forefront, deciding the direction of various asset classes including foreign exchange. The contents of this chapter are organized in the ...

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