Definition
Interest on reserve balances is interest paid by a central bank on funds banks hold in reserve.
Why It Matters
It helps control lending and interest rates.
Example
Banks earning interest on excess reserves.
Malone Global University
Malone Global University
Economics Glossary – Malone Global University
Interest on reserve balances is interest paid by a central bank on funds banks hold in reserve.
It helps control lending and interest rates.
Banks earning interest on excess reserves.