An Analytical Study of Financial Deepening and Money Market: Evidence from India

Dr.V. Sravana Kumar and Dr. Lakshmi Suneetha

This research work analyses the financial deepening and money market in India from 2004 to 2019. The work is focussed on the impact of the Indian money market on financial deepening. In the dis-embedded and unilateral economy, a depth level of financial deepening is a compulsory requirement as the pivotal role of the financial system is to mobilize the savings from lenders to the borrower for the development of the country economically. The study uses five proxy variables viz call money market rates, repo rate, reverse repo rate, Treasury bill rates (91 days, 182 days and 364 days), and statutory liquidity ratio SLR to the study the effect of the money market. Regression and Correlation analysis was used to measure the relation between the proxy variables and GDP. Official publications of the Reserve bank of India was the data source for the present study ANOVA technique was used to analyse the variation between GDP and the five proxy variables and to test the hypothesis. The study used F-distribution statistics tables to test the relationship between the predictor and the independent variables. It is found that all the money market variables are weakly contributing to financial deepening and hence the economy.

Volume 11 | 11-Special Issue

Pages: 736-745

DOI: 10.5373/JARDCS/V11SP11/20193092