Overnight Market

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Definition: Overnight Market

Overnight Market as the name suggests is a market in which short term loans are given for overnight only. The loans are expected to be returned the next day/morning.

The money is lend at a rate called overnight rate which is low. The overnight rate can change. 

The overnight market is a good way to access short term loans. There can be scenarios in which investors or institutions may need money because of the trading during the day, such players can take overnight loans and repay the next morning.

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