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Reserve Requirements Systems: A review of the experience of selected countries
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Nasrin Ebrahimi   |
| Phd, Eghtesad Novin Bank , nasrin.ebrahimmi@gmail.com |
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Abstract: (72 Views) |
Reserve requirements (RRs) are the minimum percentages or amounts of liabilities that depository institutions are required to keep on hand in cash (vault cash) or as deposits with their central banks (required reserve balances). These reserves are used by central banks as a tool to affect the demand for liquidity in the banking system. In deciding the precise structure of RRs, a central bank needs to choose which goals to prioritize. Therefore, the structure of RRs is different from country to country. These differences can be seen based on major characteristics of reserve requirement systems such as reservable liabilities, required reserve ratios, reserve computation periods, and reserve maintenance periods. Twenty-four of the thirty countries that belong to the Organization for Economic Cooperation and Development (OECD) employ reserve requirement systems. A single reserve requirement system is employed by all the European Economic and Monetary Union (EMU) countries; that system is discussed as one entity. In Iran, the characteristics of reserve requirement system, such as required reserve ratio, computation method, and reserve computation and maintenance periods, are determined by the Central Bank. |
Article number: 4 |
| Keywords: Central Bank, Monetary Policy, Reserve Requirement Systems. |
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Full-Text [PDF 455 kb]
(33 Downloads)
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Article type: Promotional |
Subject:
Special
Received: 2024/06/11 | Accepted: 2024/09/22 | Published: 2025/05/26
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