The money market is an important part of our economy. The money market fulfills short term fund requirements via various instruments. The money market instrument has a maturity period of up to one year and it can be traded in the money market at a low cost. Let’s try to understand the money market in simple terms. Suppose institutions, NBFC or government are in need of money for short term requirements. They float this requirement in the money market via instruments approved by RBI. They act as borrower in this case. They clearly define interest rates applicable to the instrument.