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The SRD Requirement and Monetary Policy *
Author(s) -
HARPER IAN R.
Publication year - 1988
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1988.tb02056.x
Subject(s) - monetary policy , monetary economics , economics , value (mathematics) , payment , intermediation , task (project management) , cash , business , finance , computer science , management , machine learning
This paper considers the role of the SRD requirement as an instrument of monetary policy. It argues that the mere presence of the SRD requirement and neither the value of the SRD ratio nor its variability over time defines the significance of the SRD for monetary policy. A decision to abolish the SRD requirement may destabilize the demand for cash and complicate the task of the monetary authorities. Payment of interest on SRD accounts would serve to alleviate the distorting effect of the SRD requirement on the pattern of financial intermediation.