Arguable, Nigeria
money market plays a vital role in the economic development of the country.
Money market is integral part of the financial sector and is among the largest
financial market in the world. Money market is the key facilitate of monetary
policy in any economy. It facilitates the transmission/transfer of funds in an
economy. It provides funds to the public and private institution that need such
financing for their working capitals requirements (Noko, 2011).
Money market provides an opportunity to banks and
other institutions to use their surplus fund profitable for short period. It
provides no need commercial bank borrowing from the CBN when they run in short
supply of cash. According to Noko (2011) money market help the government to easily
borrow with a low interest on the basis of Treasury bill rather than borrowing
from CBN that might lead to inflation in the economy. An efficient monetary
policy is achieved through CBN control of the money market activities. It
facilitates & promotes the safety of financial asset and thus encourages
savings and investment in the economy thereby accelerating economic growth. The strong thesis
approach supplements the weak thesis with special assumptions about our
environment in order to establish the role of monetary forces in business
cycle.
The role of money market in
accelerating economic growth cannot be overemphasized, giving the fact that it
facilitates the control of money supply in the economy by CBN, it help to
mobilize household saving for investment purpose, firms seek for funds here to
facilitate their working capital, through this the output of the firm increase
in the output of the firm increase their income. If this is the case of a good
number of firm in the country the aggregate output of the nation increase
drastically, and this increase the living standard of average Nigerians. This
increase in output in an indicator of economic growth while enhanced standard
of living is an indicator of economic development. Hence, the motion that, “money
market drastically accelerate economic growth in the economy of any nation”.