Near Money

Near money is a type of money that is easily convertible into cash or other forms of money. It includes:

1. Travelers checks: Cheques drawn on a bank in a different country.2. Foreign exchange: Coins and banknotes of other countries.3. Money orders: Orders to pay a specific amount of money to a particular recipient.4. Treasury bills: Government securities that are sold in small denominations and have a maturity of less than one year.5. Deposits: Amounts of money deposited in a bank account.6. Money market funds: Funds that invest in low-risk, short-term debt securities.

Characteristics of near money:

• High liquidity: Easy to convert into cash or other forms of money quickly.
• Low maturity: Have a maturity of less than one year.
• Low risk: Generally considered to be relatively safe investments.
• Interest rate sensitivity: Sensitive to changes in short-term interest rates.

Uses of near money:

• Emergency savings: Money that is saved for unforeseen expenses.
• Short-term investments: Investment in money market funds or Treasury bills.
• Payments: Used to make payments for goods and services.
• Cash: Can be used for cash transactions or as a source of credit.