IMPACT OF THE MONEY MARKET IN THE GROWTH OF NIGERIA IN ECONOMY

BACKGROUND OF THE STUDY: The financial system of any financial company provide the catalyst through financial intermediation for productive activities to ensure economic growth and development Olowo (2008).

The Nigerian financial sector is undoubtedly the most important in the political economic system because it provides the necessary lubricant that keeps the wheel of the economy turning and it is an engine for economic growth. The sector provides fund for investment and also allocates these funds for investment and also allocates these funds as efficiently as possible to those project that offers best returns to fund owners. The well being of the sector to a very large extent determines a growing economy. However, if the sector happens to be weak, the economy suffers for it.

There are various financial market which are institutional arrangement that facilitates the intermediation of funds in an economy. The market which deals with sort term funds and the capital market that is for long term dealings in loanable funds Anyanwu (1996). The basic of distinction between eh money market and the capital market lies in the degree of liquidity of instrument bought and sold in each of the market which can be subdivided into the primary and secondary market is concerned with raising of new fund, the secondary market exist for the sale and purchasing of existing securities. Therefore enabling savers who purchased securities when they had surplus to recover their money when they are in need of cash Afolabi (1991).

The major concern for the study is the money market, the money market represent the short end of the financial system which provide short term investment having a maturity date of less than one year. Also the money market is an intermediary for short term financial asset that are close substitute for money in Nigerian money market as established by the Central Bank of Nigeria primarily for mobilizing domestic savings for productive investments as well as providing government with funds to enable implement programmes (Nibeabuchi, 2004).