Deposit reserveWhat is it? It is the deposit of the central bank prepared by the financial institution to ensure the user needs to withdraw deposits and funds settlement. The ratio of the deposit reserve required by the central bank to the total deposit is the deposit reserve ratio. The ratio of deposit reserve is usually determined by the central bank and is called the deposit reserve ratio.
Under the modern financial system, the financial institution's reserve is divided into two parts, one part of which has its own business library in cash, and the other part is deposited in the form of deposits with the central bank, which is the deposit reserve.
What is the use of deposit reserve?
“Deposit reserve” is generally not allowed to be used to ensure that commercial banks pay for customer withdrawals. At the same time, it also has the function of clearing funds, and it is also a monetary policy tool.