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General TradingR
Reserve Requirement Ratio
The percentage of deposits that banks are required to hold as reserves, either as vault cash or on deposit at the central bank. Adjusting this ratio is a monetary policy tool that affects the money supply and lending capacity.
Example
“China's PBOC cut the reserve requirement ratio by 0.5%, freeing up approximately $100 billion in bank capital for lending, which boosted Chinese equities on the announcement.”