Definitions
There is 1 meaning of the phrase
Required Reserve Ratio.
Required Reserve Ratio - as a noun
A percentage of the bank's total deposits, kept to ensure that the bank is able to pay an unusually high number of withdrawals on demand accounts should that event occur.
Example: "The required reserve ratio is sometimes used as a tool in monetary policy, influencing the country's borrowing and interest rates by changing the amount of funds available for banks to make loans with."
Synonyms (Exact Relations)
cash reserve ratioreserve ratioExample Sentences
"The central bank increased the required reserve ratio in an effort to reduce inflation."
"Banks are required to maintain a certain level of reserves, known as the required reserve ratio."
"An increase in the required reserve ratio could limit the amount of money banks can lend."
"The government is considering a reduction in the required reserve ratio to stimulate economic growth."
"The central bank lowered the required reserve ratio to encourage banks to lend more."
