Chat with us, powered by LiveChat ECON 201 SEU Cash Reserve Ratio Discussion |

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Discussion Question:
Topic: 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
is given below:
Bahrain (%) — 5.0
Oman (%) — 5.0
Saudi Arabia (%) — 7.0
United Arab Emirates (%) — 1.0
As can be seen, the cash reserve ratio of Saudi Arabia is the highest among the listed
nations. “Discuss the implications of the 7% reserve rate on the Saudi economy,
”highlighting the advantages and disadvantages.

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