Reserve Requirements

Argentina: Reserve Requirements, 1994–1995

Purpose

To “inject additional liquidity” and “facilitate the movement of funds between banks” (Reuters 1995)

Key Terms

  • Range of RR Ratio (RRR) Peak-to-Trough
    Average RR for all deposits from 21% to 14% (from the cut of minimum cash requirement of 43% to 30% for demand and savings deposits and 3% to 1% for time deposits)
  • RRR Increase Period
    Not applicable
  • RRR Decrease Period
    Dec. 28, 1994–June 3, 1996
  • Legal Authority
    BCRA Charter
  • Interest/Remuneration on Reserves
    Not on minimum cash requirement; yes on the MLR (5.65% on Bank Liquidity Certificates issued by the Treasury, which was one option for satisfying the MLR)
  • Notable Features
    Three policies: minimum cash requirement, “safety net” requirement, minimum liquidity requirement
  • Outcomes
    Released ARS 4 billion (USD 4 billion) into the banking system

Key Design Decisions

Purpose1

Part of a Package1

Administration1

Governance1

Communication1

Assets Qualifying as Reserves1

Reservable Liabilities1

Computation1

Eligible Institutions1

Timing1

Changes in Reserve Requirements1

Changes in Interest/Remuneration1

Other Restrictions1

Impact on Monetary Policy Transmission1

Duration1

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Taxonomy

Intervention Categories:

  • Reserve Requirements

Countries and Regions:

  • Argentina

Crises:

  • Argentine Peso Crisis