The minimum liquidity requirement is the:
A) actual amount of reserves that banks must hold.
B) excess amount of reserves that a bank must hold.
C) minimum amount of reserves the RBA requires a bank to hold.
D) total amount of reserves that banks hold at all times.

Question

Quizplus · Accepted Answer

The minimum liquidity requirement refers to the minimum amount of reserves that the Reserve Bank of Australia (RBA) requires a bank to hold. This ensures that banks have enough funds to cover their obligations to depositors and creditors. Therefore, the correct answer is C, which is the only choice that accurately describes the minimum liquidity requirement.

The Minimum Liquidity Requirement Is The