Euro Money Market

The Euro Money Market is a segment of the financial market in which short-term borrowing, lending, and trading of financial instruments denominated in euros occur. Key instruments in this market include Euro-denominated deposits, certificates of deposit, repurchase agreements (repos), and Treasury bills. The Euro Money Market plays a vital role in providing liquidity to financial institutions, companies, and governments, facilitating efficient short-term funding and investment. This market is essential for managing liquidity, interest rate exposure, and currency risk, with participants including banks, central banks, corporations, and institutional investors.

Example

A European bank might engage in the Euro Money Market by issuing short-term Euro-denominated certificates of deposit to raise liquidity.