REQUIRED RESERVE RATIO AS AN INSTRUMENT OF MONETARY POLICY OF CENTRAL BANKS: ESSENCE, FUNCTIONS AND OBJECTIVES

Abstract

The article deals with the interpretation of the essence of the required reserve ratio and the principles of its application by central banks as a monetary policy tool. The history of using this tool in different countries is explored. The survey is performed according to data from central banks of Ukraine, Great Britain, Poland, Belarus and the European Central Bank. In the article there is identified the impact of the required reserve ratio on the main macroeconomic indicators. Separately, there are identified the functions of required reserves that created possibility to distinguish two new functions of the general group: control and warranty.