Target cash balance

Target cash balance

Optimal amount of cash for a firm to hold, considering the trade-off between the opportunity costs of holding too much cash and the trading costs of holding too little cash.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
References in periodicals archive ?
Now that we have our cash inflow, we can combine it with cash disbursements, a target cash balance of $150, and beginning short-term borrowings to compute our net cash flow and short-term borrowing at each month's end.
By starting to target cash balances held by financial institutions at the BOJ instead of the previous policy of targeting short-term money market rates, the central bank in effect reinstated the zero-interest-rate policy implemented between February 1999 and August 2000.
The Policy Board decided at the meeting to target cash balances held by financial institutions at the BOJ instead of short-term money market rates, by boosting the balance of commercial bank's reserves at the BOJ to around 5 trillion yen from the current 4 trillion yen.
Amid growing deflationary fears and sagging stock prices, the BOJ decided at its March meeting to target cash balances held by commercial banks at the central bank in a major policy shift from targeting the key short-term interest rate.
In a move that signals a major policy shift, the central bank decided to target cash balances held by financial institutions at the BOJ, instead of the existing policy of targeting short-term money market rates.