A money market account (MMA) or money market deposit account (MMDA) is a non-monetary account that pays curiosity based mostly on present interest rates within the cash markets.
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The priority about runs stems from the fact that MMMFs and GSEs could merely cease transacting with any private sector counterparties if there was some form of disaster/scare and run straight to the most secure counterparty on the earth – the Fed – if there was no cap on the ON RRP facility. It’s a reliable concern, as tri-occasion repo markets would merely cease to exist, and that’s not what a liquidity supplier of final resort wants to see – they want to see the markets open and liquid.
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The RBI holds ninety one days treasury payments (TBs) and they are issued on tap foundation throughout the week. Nevertheless, 364 days TBs are bought by way of auction which is performed once in a fortnight. The date of auction and the final date of submission of tenders are noticed by the RBI through a press release. Traders can submit a couple of bid additionally. On the subsequent working day of the date of public sale, the accepted bids with the costs are displayed. The successful bidders have to gather letters of acceptance from the RBI and the deposit the same together with a cheque for the amount due on RBI within 24 hours of the announcement of public sale results.