The reserve ratio is the portion of reservable liabilities that commercial banks must hold onto, rather than lend out or invest. This rate is determined by the Country’s Central Bank. The Cash Reserve Ratio of select Middle Eastern Countries are given below:
Bahrain (%) — 5.0
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The reserve ratio is the portion of reservable liabilities that commercial banks
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Oman (%) — 5.0
Saudi Arabia (%) — 7.0
United Arab Emirates (%) — 1.0
As can be seen, the cash reserve ratio of Saudi Arabia is highest among the listed nations. “Discuss on the implications of the 7% reserve rate on Saudi economy, highlighting the advantages and disadvantages”.
Students are required to reply to at least two peer responses to this week’s discussion question. Your replies need to be substantial and constructive in nature.