Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
How Central Banks Use Reserve Requirements as a Policy Tool
In this episode of Monetary Policy Explained, Lucas and Luna dive into an often-overlooked but powerful tool in the central bank toolkit: reserve requirements. While many assume reserve requirements are a relic of the past, they are quietly making a comeback in places like China and emerging markets. The hosts unpack how reserve requirements interact with interest on reserves and quantitative easing, using the People's Bank of China's recent adjustments as a concrete case study. They explain why the Federal Reserve and European Central Bank rarely use this tool today, yet why it…
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