What is required reserve on a new deposit of u$11 million

Reference no: EM133264765

Question: Central banks are one of the key participants in global financial systems given their role in formulating monetary policy thus impacting interest rates, credit and money supply and therefore economic growth and inflation.

A) Consider a bank policy to maintain 15% of deposits as reserves with the Reserve Bank of Australia. The bank currently has US$150 million in deposits and holds US$4.75 million in excess reserves. What is the required reserve on a new deposit of U$11 million?

Reference no: EM133264765

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