What is the concept of RMB reserve ratio?

Deposit reserve refers to the amount of money prepared by financial institutions in the bank to ensure that customers withdraw deposits and settle funds, and the proportion of deposit reserves required by the bank to its total deposits is the deposit reserve ratio. By adjusting the reserve requirement ratio, banks can affect the credit expansion ability of financial institutions, thereby indirectly regulating the amount of money.

Reserve Requirement Ratio:

Financial institutions must deposit part of the deposit in the ** bank, which is called the deposit reserve; The ratio of reserve requirement to total deposits of financial institutions is called the reserve requirement ratio.

For example, if the reserve requirement ratio is 7, it means that for every 1 million yuan of deposits absorbed by financial institutions, they have to deposit 70,000 yuan of deposit reserves with the central bank, and the funds used to issue loans are 930,000 yuan. If the reserve requirement ratio is raised to 10,000 yuan, then the loanable funds of financial institutions will be reduced to 10,000 yuan.

Under the deposit reserve system, financial institutions cannot use all the deposits they absorb to issue loans, and must retain a certain amount of funds, i.e., deposit reserves, for the needs of customers to withdraw money, so the deposit reserve system is conducive to ensuring the normal payment of financial institutions to customers. With the development of the financial system, the reserve requirement has gradually evolved into an important monetary policy tool. When the bank lowers the reserve requirement ratio, the funds available for loans by financial institutions increase, and the total amount of loans and money in the society also increases accordingly; On the contrary, the total amount of loans and the amount of money ** in the society will decrease accordingly.

The increase in the deposit reserve ratio increases the bank's non-loanable amount ratio, thereby reducing loans, weakening the liquidity of funds in the society, reducing the amount, reducing the amount of money entering the market, and reducing the amount of money to buy, which is a negative for the bank!

Reserve requirement means that the People's Bank of China, in accordance with the provisions of the law, requires all commercial banks to deposit a certain proportion of the deposits they absorb into the reserve accounts opened by the People's Bank of China, so as to control the behavior of commercial banks in using deposits to issue loans. The proportion of reserves paid by commercial banks is the reserve ratio.

After several turnovers, the purchasing power of the People's Bank of China's dollar is equivalent to three times that of this reserve. Paying 5 cents more means that we end up with less purchasing power in our economic life. So this time, the People's Bank of China raised the reserve ratio by one percentage point, locking in 110 billion funds, that is, its final purchasing power was reduced by nearly 300 billion.

**Banks can control the size of their assets through open market operations, adjusting the rediscount rate and the reserve requirement ratio, so as to directly determine the amount of base money, and then affect the money supply. ** Banks expand or contract credit by adjusting the statutory reserve requirement ratio to increase or decrease the excess reserves of business I, so as to achieve the purpose of monetary policy.

Main functions: 1. Ensure the liquidity of funds of depository monetary institutions such as commercial banks. When some banks have a liquidity crisis, they have the ability to bail out these banks and help them recover liquidity by providing short-term credit.

2. Concentrate on the use of a part of the credit funds. This is the "lender of last resort" responsibility of the ** bank as the bank, which can also provide rediscounting to the financial institution.

3. Regulate the total money supply. For example, if the bank absorbs 1,000 yuan in deposits, and the deposit reserve ratio is 10%, then the maximum amount that the bank can use for investment in the same period is 900 yuan, and the 100 yuan reserve must be deposited in the account designated by the central bank; One of the roles of the reserve requirement is to prevent the risk of a run, and now it has been put to good use and has become one of the tools to curb investment.

The so-called reserve requirement ratio refers to the fact that financial institutions pay a certain proportion of deposits to the People's Bank of China, and this part of the deposits will be kept in the People's Bank of China to ensure the needs of financial institution customers to withdraw deposits and settle funds, so as to control the risks of financial institutions and adjust the amount of money in the market. The reserve requirement ratio is one of the means of financial regulation and control in the country's economic development, and the adjustment of the reserve requirement ratio can promote the steady and healthy development of the country's economy and improve the people's living standards.

The deposit reserve is determined by the People's Bank of China, and the People's Bank of China will require financial institutions to pay deposit reserves according to the actual situation of the market, and the deposit reserves paid by each financial institution will be multiplied by the corresponding proportion according to the size of the financial institution's deposits, and the proportion is the deposit reserve ratio, and the state will set different deposit reserve ratios according to different financial institutions.

The People's Bank of China (PBoC) has different reserve requirement ratios for different financial institutions, and will carry out targeted regulation and control according to the key areas played by financial institutions, so that financial institutions can fully play their role and inject vitality into the social economy.

Although the financial institutions have to hand over the deposit reserves to the People's Bank of China, the financial institutions will not lose the opportunity to obtain profits, because the People's Bank of China will pay interest to the financial institutions.

The so-called reserve ratio means that financial institutions pay a certain percentage of savings to the People's Bank of China, and this part of the deposits will be deposited in the People's Bank of China, and the reputation stool is used to ensure the needs of financial institution customers to withdraw deposits and fund settlement, so as to control the risk of financial institutions and adjust the amount of money in the market.

The reserve requirement is determined by the People's Bank of China, and the People's Bank of China will stipulate that financial enterprises should pay statutory reserves according to the actual situation of the market, and the reserves paid by each financial enterprise will be multiplied by the scale of the financial institution's deposits and the corresponding proportion, of which the proportion is the deposit reserve, and the state formulates different deposit reserve ratios for different financial enterprises.

The People's Bank of China has different statutory reserve ratios for different commercial banks, and can carry out targeted regulation and control according to the key areas played by financial enterprises, which can allow financial institutions to play a full role and inject vitality into the social economy. If the statutory reserve ratio is relatively low, financial enterprises will pay less funds to the People's Bank of China, and financial institutions will have more funds on hand, and financial institutions can use the funds on hand for business, and enterprises will have more funds on hand. If the statutory reserve ratio is relatively high, then financial enterprises will pay more assets to the People's Bank of China, financial institutions will have less funds on hand, financial institutions will have less funds for business, and enterprises will receive less funds.

Deposit reserve refers to the sale of central bank savings carefully prepared by financial enterprises to ensure the needs of users to obtain savings and fund settlement. The ratio of the reserve requirement required by the central bank to the amount of deposits is the statutory reserve ratio.

The real effectiveness of the current policy on reserve requirements should be reflected in the adjustment of banks' ability to expand credit and money supply. This is because the bank's ability to expand credit and the total amount of the central bank's minimum currency are related to the investment multiplier, which is inversely proportional to the reserve requirement.

Therefore, if the central bank adopts monetary easing, it can raise the reserve requirement prescribed by law, limit the level of credit expansion of banks, reduce the money supply, and finally tighten the amount of money and credit, and vice versa.