What are Money Market Interest Rates Based On?

Money market interest rates include interbank rates, commercial paper interest rates, government bond repurchase rates, government bond spot rates, and foreign exchange rates. From the perspective of the mechanism of interest rate formation, the money market interest rate is sensitive and efficient to the relationship between supply and demand of social funds, and is an important indicator of market capital conditions and a measure of financial product returns.

Money market interest rate

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Money market interest rates include

From the perspective of the mechanism of interest rate formation, the money market interest rate is sensitive and efficient to the relationship between the supply and demand of social funds, and is an important indicator of market capital conditions and a measure of financial product returns.

In some foreign countries, the marketization of interest rates begins with the development of the currency market. By increasing the variety of short-term financial instruments and expanding the size of the currency market, the currency market is improved to liberalize the interest rate of non-loan short-term financial assets and generate a reliable currency interest rate signal. The promotion of bank deposit and loan interest rates eventually formed a market-based interest rate system. The central bank also monitors the market interest rate level based on the money market interest rate level, predicts the market interest rate trend, and formulates a basic interest rate. Therefore, the money market interest rate is the key link of interest rate liberalization.