Inter-bank markets are among the most important in the financial system. They are the focus
of central banks' implementation of monetary policy and have a significant effect on the
whole economy. Transactions in the inter-bank funds market provides signal of what obtains
in the open credit market. However, apart from the rate of interest (cost of transaction) in the
market that influences the tempo of activities, other determining factors are liquidity position
of the banks, and change in the demand for foreign exchange which determines the …

Inter-bank markets are among the most important in the financial system. They are the focus
of central banks' implementation of monetary policy and have a significant effect on the
whole economy. Transactions in the inter-bank funds market provides signal of what obtains
in the open credit market. However, apart from the rate of interest (cost of transaction) in the
market that influences the tempo of activities, other determining factors are liquidity position
of the banks, and change in the demand for foreign exchange which determines the …