Reserve requirements (required reserves)

By | 2017-09-13T15:28:31+00:00 13th September 2017|

Reserve requirements are requirements regarding the amount of cash a bank must hold in reserve against deposits made by customers. This money must be in the bank’s vaults or at the Czech National Bank. The level of reserve requirements is one way of controlling money supply velocity and thus inflation, the others being open market operations between the Central Bank and the banks and the level of interest rates.