THE ROLE OF THE NIGERIA MONEY MARKET IN INDIGENISING THE CREDIT BASE OF THE ECONOMY

CHAPTER ONE

INTRODUCTION

The money market is place or mechanism by which short – term funds or exchanging financial assets representing short-term claim are obtained .

 A money market can be simply defined as a market  consisting of financial institutions and other dealers in short term money and credit who either want to lend or borrow money .As a group , these financial organization and deders facilitates the borrowing and lending of short –term money by  bringing together those institutions with surplus funds which they wish to lend on a short- term basis and those wished to borrow.

The Nigeria money market could be said to love started with the commencement of commercial banking in 1894. However , due to various military factors ,the development of the money market was not possible until the establishment of the Nigeria central bank and the introduction of the money instruments . it is important to note that the money market in Nigeria is not located in any fixed or particular place or building where money is bought and sold . it is merely a term , which embraces all the institutions that handle the purchases , sales and transfer of short term money and credit instruments . The market operates by means of the telephone or personal contacts between the participants. It is only when a deal is struck that most transactions are finally concluded at the central bank were credit and debit are raised. This is the way money market developed economics also operates ( ie mainly by telephone and personal contacts )  but does not mean that the market is never a designated place.

Money market activities can be carried out at specific area, street , as in the case of well street in new York or lomba  street in London . The later being almost synonymous with the London money market, is the central of bank head offices and discount houses.

The money market provides the central bank of Nigeria with a very important financial environment to implement monetary policy operating through the market , it raises or lowers bank reverse through open market purchase and sales of securities.

STATEMENT OF THE PROBLEM:

A part from performing traditional  function of the  money market , are of the main reasons for establishment of Nigerianzation of the credit basis . A money market was therefore necessary in the achievement of this objective by providing outlets in term of local money assets for the investment of surplus funds in the country as well as funds repatriated from abroad . it was also necessary to provide for government a source for short- term financing which among other things can release for capital expenditure some of the fund which at that time government deployed as work capital.

The study is to assess the role of the operation of the Nigeria money market in indigenising the credit base of the Nigeria economy.

OBJECTIVE OF THE STUDY:

The objective of the study is to assess the role of the Nigeria money market in indigenising the credit base of the economy by assessing particularly:

A)            The availability, adequacy and defects if any of money market instruments in Nigerian money market.