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Reserve Ratios
(redirected from Required Reserve)

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Reserve ratios
Specified percentages of deposits, established by the Federal Reserve Board, that banks must keep in a noninterest-bearing account at one of the twelve Federal Reserve Banks.

Reserve Ratios
The liquid assets that a central bank or other body mandates that a bank keep at all times. The reserve ratio is expressed as a percentage of the bank's total deposits. The reserve ratio exists to ensure that the bank is able to pay an unusually high number of withdrawals on demand accounts should that event occur. It also helps ensure that the bank does not over-leverage itself. In some countries, increasing or decreasing reserve ratios may be used to help control the money supply. See also: Basel II, Monetary Policy.


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Contrary to a general tendency abroad against a background of soaring inflation, Simsek said Turkey had opted to cut interest rates while raising required reserve ratios.
The People's Bank of China raised interest rates twice last year and officially increased lenders' required reserves six times.
7, 2011 (CENS) -- Taiwan's central bank recently announced to raise the required reserve ratio of NT dollar passbook deposits held by foreigners to a ceiling of 90%, with the Bank of Taiwan (BOT), a leading government-linked bank, to lower the interest rate for such deposits to 0% from 0.
 
 
 
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