ECON 201 SEU Reserve Rate Implications on Saudi Economy Cash Reserve Discussion

Question Description

Note:

In addition to the discussion required (4-6 paragraphs at least) tow general short replies on the same topics are required too.

Discussion Board: Topic:

The reserve ratio is the portion of reservable liabilities that commercial banks must hold onto, rather than lend out or invest. This rate is determined by the Countrys Central Bank. The Cash Reserve Ratio of select Middle Eastern Countries are given below:

Bahrain (%) 5.0

Oman (%) 5.0

Saudi Arabia (%) 7.0

United Arab Emirates (%) 1.0

As can be seen, the cash reserve ratio of Saudi Arabia is highest among the listed nations. Discuss on the implications of the 7% reserve rate on Saudi economy, highlighting the advantages and disadvantages.

Students are required to reply to at least two peer responses to this weeks discussion question. Your replies need to be substantial and constructive in nature.

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