There are certain assets which are highly liquid, though not perfectly liquid like money., These assets can easily be converted into money without much loss of time or value and have, therefore, come to be known as 'Near-Money.'

Examples of near-motley are bills of exchange, bonds, saving certificates, treasury bills, debentures, etc. Such near-money assets are claims on money i.e., these assets have to be first converted into actual money before using them for the purchase of any commodity. The importance of near-money asset, therefore, lies in the ease with which it can be sold’ in the market without much loss of time or value. However, both money and near-money are similar in one respect: that both of them are claims. Money is a claim over the government or central bank of the country, who has issued it while bank money is a claim over banks with whom money is held as public deposits. Likewise, near-money is also a claim over its issuing authority. For instance, a bill of exchange is a claim over the party which has agreed to pay the amount specified in the bill at the expiry of the specified period, say 91 days. Similarly, a bond represents a claim on the government which has issued it.

Mayank Rai

Hi, My name is Mayank Rai. I found that Blogging is an easiest way to share your knowledge with everyone & learn something new from there. facebook telegram

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