Reserve Requirements Research Articles

Analisis Kinerja Keuangan Berdasarkan Rasio Likuiditas Dan Profitabilitas Pada PT. MAYORA INDAH Tbk. Periode 2020-2023

The purpose of this study was to measure and analyze financial performance based on liquidity ratios and profitability ratios at PT Mayora Indah Tbk for the 2020-2023 period. This research uses quantitative descriptive research methods using data from the audited and released financial statements of PT Mayora Indah Tbk from the Indonesia Stock Exchange (IDX). The results of this study indicate that using the liquidity ratio consisting of current ratio, quick ratio and cash ratio achieved by the company during the four periods from 2020 to 2023 has fluctuated, but the company's liquidity level is still good because it is still above the industry average standard which shows that the company uses assets owned by the company to meet its short-term obligations. And using profitability ratios consisting of return on assets, return on equity, return on investment, gross profit margin, and net profit margin in 2020 to 2021 has decreased and in 2022 to 2023 the company has increased but is still far below the average standard industry ratio so that it shows that the company's profitability is not good. Thus, it can be concluded that liquidity has a close relationship with profitability, this indicates a large placement of funds on the current asset side. Suggestions that can be useful for company management are to improve the financial performance of PT Mayora Indah Tbk, management should utilize existing capital more effectively through profitable investments, such as product development, in order to increase sales and expand market share.For future researchers, it is recommended that further research be carried out with a longer period of time.In addition, the ratio used is added again in measuring financial performance, so that the results obtained are maximized.

Analisis Permintaan Uang dan Penawaran Uang serta Implikasinya Terhadap Kebijakan Moneter

Bank Indonesia sets the main objectives of monetary policy to achieve stability in the value of the rupiah, maintain payment system stability, and maintain financial system stability, in order to support economic growth. The aim of this research is to analyze the influence of GDP on the demand for money, the influence of the BI-Rate on both the demand for money and the supply of money, as well as the influence of inflation, the exchange rate and the statutory reserve requirement (GWM) on the supply of money, and the implications for monetary policy. Research period 2010-2023. The data analysis method is the Two Stage Least Square (2SLS) simultaneous equation model. The results obtained are that GDP has a significant positive effect on the demand for money, BI-Rate has a significant negative effect on both the demand for money and the supply of money, inflation has a significant negative effect on the supply of money, and the exchange rate and GWM are proven to have a significant positive effect on the supply of money.

Liquidity indicators, fund utilization efficiency, and their impact on profitability in commercial banks

This research discusses the relationship between liquidity measures, namely, cash liquidity and legal liquidity, the legal reserve ratio on economic fund utilization as reflected in the granting of credit facilities, investments, and deposits, and their impact on profitability amongst the selected Jordanian commercial banks (JCB) that are listed on the Amman Stock Exchange (ASE). The applied methodology adopts financial reports and statements from 12 JCB during the period starting from 2011 to 2022. Analysis of the multiple measures of the methodologies used to test these relationships was done using multiple regression analysis as the main statistical tool. Results show a significant correlation between cash liquidity and legal liquidity measures and efficiency of funds utilization in the banks under review. Yet no statistically significant relationship was found between the legal reserve ratio and fund utilization efficiency. Furthermore, the study establishes a strong relationship between fund utilization efficiency and return on assets (ROA) and between cash liquidity and legal liquidity measures and ROA. On the other hand, the legal reserve ratio had no meaningful correlation with the ROA. These findings will help the JCB to keep a good balance between liquidity management and profitability maximization. Proper allocation of the existing liquidity level in lending to credit facilities and several investment opportunities is going to generate sustainable financial returns with perpetual cash flow. Moreover, the study suggests that an informed scientific approach to adequate fund allocation would enable banks to maximize profitability with an acceptable risk profile while complying with the liquidity requirements set forth by financial regulators. Such balance is important to become compliant with the guidelines set forth by the wider financial system towards ensuring financial stability and sustainability.

Reasons for accelerating inflation in the Russian economy

The article shows that the increase in inflation in 2020—2024 is associated with the acceleration of the growth rate of the money supply. The main contribution to the growth of the monetary base was made by transactions with the National Wealth Fund, which were not sterilized. Following this, there was an acceleration in the growth rate of lending, supported by preferential programs and a decrease in the required reserve ratio, which was reflected in an increase in the credit multiplier. Accelerated growth in the money supply led to an increase in the growth rate of consumer prices. The current phase of the economic cycle, together with the labor shortage, is increasing inflationary pressure. Inflation growth could have been even greater if not for the increased demand for real cash balances and high rates of real GDP growth in 2023—2024. Along with a tight monetary policy, additional measures to reduce inflation may include slower indexation of regulated prices and excise rates; limiting the growth rate of the consumer and auto loan portfolio of commercial banks; increasing reserve requirements for them.

Effects of inflation and macroprudential policies on bank risk: Evidence from emerging economies

This study explores the relationship between macroprudential policies, inflation, and bank risk in emerging economies. Several significant findings emerge based on panel data from approximately 1400 commercial banks across 32 emerging economies over the period 2000–2018. Firstly, a positive correlation is observed between inflation rates and bank risk, suggesting that inflation increases financial instability. Contrary to their intended purpose, stringent macroprudential policies actually intensify bank risk during periods of high inflation rather than stabilizing economies. Secondly, the analysis indicates that macroprudential tools designed to moderate credit cycles significantly enhance the risk banks face from inflation. Varied impacts are observed among different macroprudential instruments: capital-related, reserve requirement, and foreign exchange-related tools counterproductively heighten bank risk during periods of high inflation. Conversely, asset-based and liquidity-focused tools effectively reduce bank risk under similar inflationary conditions.

Impact of Monetary Policy on Profitability: An Analysis of Nepal's Listed Commercial Banks

The banking industry plays a crucial role in facilitating resource distribution and sustainable development, making it a vital component of Nepal's economic structure. Through tools like the Cash Reserve Ratio (CRR), bank rate, and open market operations, the Nepal Rastra Bank (NRB), which oversees monetary policy, has a significant impact on the liquidity and profitability of commercial banks. Using panel data from 2015 to 2023, this study examines how the Cash Reserve Ratio (CRR) affects the profitability of 20 Nepali commercial banks that are registered. The three key metrics of return on equity (ROE), return on investment (ROI), and return on assets (ROA) are used to evaluate profitability. To investigate the relationship between CRR and these metrics, a simple linear regression model is used. At the 10% significance level, the results show a statistically significant negative impact of CRR on ROA, while the relationships with ROE and ROI are considered statistically insignificant. These results imply that banks' ability to lend is restricted by higher CRR levels, which also limit their revenue-generating potential. On the other hand, by making more money available for lending and investments, lowering the CRR can improve profitability. In order to maximize financial performance, the study highlights how crucial it is for Nepalese commercial banks to include CRR dynamics in their strategic planning. To further understand the relationship between monetary policy and bank profitability, future studies should take into account a wider range of macroeconomic and microeconomic factors.

Data on Liquidity Ratio Analysis of PT PLN (Persero) in 2022-2023

This study evaluates the liquidity ratios of PT PLN (Persero) based on audited financial statements for 2022-2023. The focus is on three key metrics: the current ratio, quick ratio, and cash ratio. Data analysis shows an increase in the current ratio from 0.82 to 0.91, though still below the industry standard of 2.00. The quick ratio improved from 0.70 to 0.79, yet remained under the ideal benchmark of 1.00. The cash ratio increased from 0.35 to 0.39, surpassing industry standards. Despite these positive trends, PT PLN needs further enhancements in current asset management and short-term financial strategies to optimize liquidity. This article provides stakeholders with valuable insights for investment, lending, and internal policy decisions

Ranking the determinants of financial performance using machine learning methods: an application to BIST energy companies

Energy has been a key driver of change globally. As a developing country, Türkiye's increasing energy demand and consumption highlight the growing importance of efficient and sustainable energy management for its future. This study aims to determine the variables of the financial performance of 12 energy companies. Three different models are created with the return on assets, return on equity, and net profit margin as financial performance indicators of 12 firms. 12 financial ratios are used as input variables as determinants of financial performance. In the analysis, 37 quarterly data between 2014Q4-2023Q4 are used as the sample period. In machine learning, 17 different algorithms are considered in the selection of the appropriate model. The findings indicate that the Bagged Tree algorithm achieved successful outcomes for the ROA target variable, the Boosted Tree model demonstrated effective performance for the ROE model, and the Linear SVM algorithm yielded favorable results for the NPM model. According to the result obtained by the LIME method, Liquidity Ratio and Cash Ratio affect the ROA, ROE, and NPM models positively, while inventory turnover affects the models negatively.

The Influence of Loan Deposit Ratio, Liquidity Reserve Requirement Ratio, Leverage, and Company Size on Window Dressing: Conventional Commercial Banks Listed on the Indonesia Stock Exchange for the Period 2018-2022

The Influence of Loan Deposit Ratio, Liquidity Reserve Requirement Ratio, Leverage, and Company Size on Window Dressing: Conventional Commercial Banks Listed on the Indonesia Stock Exchange for the Period 2018-2022

Using combined accrual and cash ratio analysis to determine pre-bankruptcy status

Using combined accrual and cash ratio analysis to determine pre-bankruptcy status

Influence of Liquidity Management of Commercial Banks in Nepal Mini Chaurasia

The purpose of paper is impact of liquidity management and commercial banks' profitability in Nepal is examined in this study. Descriptive statistics, Pearson correlation, regression analysis, and the t-test were used to analyse the data. Three (3) samples that were used for the analysis covered the commercial banks in Nepal from 2014 to 2023. The factors of the Credit Deposit Ratio (CDR), Capital Adequacy Ratio (CAR), Current Reserve Ratio (CRR), and profitability, including Return on Assets (ROA), are all represented by liquidity management. With a R square value of 0.628, the study's results demonstrate a strong positive correlation between the dependent variable and the set of independent variables, with the independent variables accounting for 62.8% of the variation in the dependent variable and other variables outside the model for 37.2%. The findings indicated that while CAR had a little effect on the return on assets (ROA) of Nepal's commercial banks, CDR and CRR had a considerable influence.

Analisis Rasio Keuangan Sebagai Tolak Ukur Peringkat Kinerja Keuangan Studi Kasus PDAM Tirta Pakuan Bogor Periode 2018 – 2022

Financial performance is a measure of the effectiveness and efficiency in utilizing the financial resources of an entity to achieve predetermined goals. PDAM Tirta Pakuan Bogor, a regional service company in the city of Bogor, serves as the primary distributor, ensuring the availability of drinking water for the local community. Therefore, financial performance analysis is crucial as a tool for information and joint evaluation for PDAM Tirta Pakuan. The quantitative analysis in this study employs several ratios with the following results: Profitability - Return On Equity (ROE): 9% (Not Good), Return On Asset (ROA): 7% (Not Good). Liquidity - Cash Ratio: 149% (Excellent), Current Ratio: 154% (Excellent). Operating Ratio - Operating Ratio: 154% (Excellent), Operating Profit Margin Ratio: 30% (Less than optimal). Activity Ratio - Receivable Turnover: 85% (Excellent), Bad Debt To Sales: 13% (Not Good). Solvency - Debt To Equity Ratio (DER): 35% (Low), Debt To Assets Ratio (DAR): 27% (Less than optimal). Based on the ratio rating indicators from the BUMD 2020 Performance Book according to Domestic Decision No. 47 of 1999, 2020, the financial performance of PDAM Tirta Pakuan is deemed "Very Good." This analysis provides essential information for PDAM Tirta Pakuan in conducting evaluation and improvements to enhance its financial performance.

Decision support system for determining capital investment value in biodiesel production using the net present value method

Biodiesel is a renewable alternative that is a biofuel for diesel engine/motor applications. It is a fatty acid methyl ester (FAME) that is produced from vegetable oil or animal fat and can be renewed. The esterification/ transesterification process results in low CO2/CO2 emissions. Indonesia's energy consumption has increased by 7% annually in recent years, while the global energy consumption has only increased by 2% annually. This condition accelerates the rate of exploitation of fossil resources, including oil, natural gas, and coal, in comparison to the discovery of new reserves (replace reserves ratio). Economic calculations are conducted during the pre-design phase of a biodiesel chemical plant to ascertain the viability of investing in a biodiesel plant. The feasibility of capital investment in a factory production activity is estimated through the use of economic analysis, which involves the evaluation of capital requirements, predicted profits, payback period, taxes imposed, and break-even point. Furthermore, economic analysis is also used to ascertain the profitability of a factory that has been designed. The net present value (NPV) method is employed to develop a decision support system that simplifies the investment calculation process. In the present era of globalization, a company or investor must act promptly to make decisions and take action. The Net Present Value (NPV) method is used to assist in decision-making. The NPV method is a decision-making process that evaluates the feasibility of whether an investment is worthwhile. The value of an asset is determined by the initial purchase price and the time value of money, which are combined to calculate Net Present Value. The investment value of the SPK that has been designed is determined using the NVP procedure.

Changes in microcirculation following transcatheter aortic valve implantation in patients with stable coronary artery disease.

Few studies have assessed coronary physiology in the setting of coronary artery disease (CAD) with severe aortic stenosis (AS). Fractional flow reserve (FFR) to guide revascularization in such patients is not validated. We describe changes in coronary physiology in this population before and after transcatheter aortic valve implantation (TAVI). Patients with stable CAD and severe AS treated with TAVI were prospectively included during 2020-2023. Coronary physiology was assessed before and immediately after TAVI, and at follow-up (median 5.4 months). Twenty-nine patients (mean age 81.3 years) were included. Median (95% confidence interval) FFR decreased numerically, from 0.83 (0.79-0.84) pre-TAVI to 0.81 (0.78-0.83) post-TAVI. During hyperaemia, the transit mean time reduced numerically, from 0.27 (0.19-0.35) to 0.20 (0.18-0.27) seconds, reflecting increased coronary flow. Basal microvascular resistance increased numerically, from 24 (21-35) to 32 (23-45), while resistive reserve ratio increased significantly, from 1.8 (1.5-2.3) to 2.6 (2.2-3.1) (P=0.002). Consequently, coronary flow reserve (CFR) improved significantly, from 1.5 (1.2-1.7) to 1.9 (1.5-2.4) (P=0.006). Among 21 patients with follow-up, no significant change in FFR was observed and the significance of the increase in CFR was lost. Only three patients had an index of microvascular resistance>25, indicating microvascular impairment during hyperaemia. In stable CAD patients treated with TAVI for severe AS, valve replacement provides an immediate improvement in CFR. FFR shows a minimal decrease after valve implantation, supporting its reproducibility to guide revascularization in such patients. .NCT04663334.

UNCONVENTIONAL MONETARY POLICIES AND FINANCIAL MARKETS: A CAUSALITY ANALYSIS FOR TURKIYE

This study investigates the influence of the Central Bank of the Republic of Türkiye’s unconventional monetary policy tools on the BIST100 index, utilizing monthly data from January 2013 to December 2023. The analysis focuses on the Reserve Requirement Ratios (for both Turkish Lira and Foreign Currency) and the Late Liquidity Window Rate as measures of unconventional policy, while the BIST100 index represents financial market performance. The results indicate a unidirectional causality from the Late Liquidity Window Rate to the BIST100 index, suggesting that policy impacts the market through a significant but narrow channel. Conversely, no causal relationship is observed between the reserve requirement ratios and the BIST100 index. These findings highlight the limited efficacy of the Central Bank’s unconventional policy tools in stabilizing financial markets.

Value for money in humanitarian assistance: How does cost efficiency vary across cash and voucher programmes?

AbstractMotivationCash and voucher assistance has become a key part of humanitarian response over the last decade as it is able to meet people's basic needs during a crisis and it has high cost efficiency relative to traditional in‐kind assistance.Donors have been introducing cost‐efficiency benchmarks—set as cost‐transfer ratios, the ratio of costs of delivery to the value of cash or goods provided to beneficiaries—for cash and voucher programmes. These benchmarks function as price ceilings for humanitarian agencies providing cash and voucher assistance. The welfare effects of these price ceilings, however, are unclear. They could induce greater efficiency, depending on the cost function for cash and voucher assistance programmes, but they could also have widely different consequences across contexts and could even undermine equity.PurposeWe ask what determines the cost‐transfer ratios of cash and voucher assistance programs? How do cost‐transfer ratios vary by size of benefit delivered, local cost levels, scale of programme, and region? What do the results imply for setting cost‐efficiency benchmarks and humanitarian programming?Approach and methodsWe use a novel set of cost‐efficiency data for 31 humanitarian cash and voucher assistance programmes to examine the variation in delivery costs for humanitarian cash and voucher programmes, and to understand what causes these delivery costs to vary. Regression analysis is used to see the impacts of different characteristics of the programmes on their cost‐transfer ratios.FindingsWe find substantial variation in cost‐transfer ratio efficiency across cash and voucher assistance programmes based on their design and context. Programme scale and local price levels explain the largest fraction of variation: larger programmes and contexts with high local prices tend to push down cost‐transfer ratios.Policy implicationsBenchmarks for cost‐efficiency should be specific to context. Global price ceilings for cash and voucher assistance are likely to undermine quality delivery in contexts where local price levels are low and programmes are small, without fully capturing possible efficiency gains in other contexts. This finding, intuitive to economists familiar with economies of scale, runs counter to views common within humanitarian agencies, where limited budgets—budgets insufficient to meet needs—are thought to have the effect of improving cost‐efficiency.Programmes designed around data‐driven benchmarks offer at least as much leverage as price ceilings for improving the value for money of cash and voucher assistance programmes.

Does Inflation-targeting Policies Worsen Income Inequality in its Trading Partner?

Interest rate hike as an instrument for inflation-targeting has been adopted quite aggressively in recent times by the Fed Bank of the United States, which has some far-reaching implications for emerging market economies like India. In such a context, this article explores implications of interest rate hike by a large foreign country for wage inequality between skilled and unskilled workers in a domestic economy. We focus on the supply side channel: hike in foreign interest rate affecting wage inequality through its impact on domestic investment, capital formation and consequent changes in the composition of aggregate output. We show that the wage inequality worsens if capital-cost share in a composite traded good is larger than the capital-cost share in a skill-based export-good Z. Domestic policies such as credit expansion by changing the cash-reserve ratio and increase in money supply help mitigate this worsening wage-inequality effect of interest hike abroad. This issue assumes relevance because of rising concerns among the major central banks the world over about the income distributional impacts of monetary policies, whereas most of the recent income inequality trends seem to have been contributed largely by rising skill premiums. JEL Codes: E52, F41, F11, E24

Analyzing the Influence of Monetary Policy on Nigeria's Economic Expansion

This paper examined the connection between key monetary policy indicators and economic growth in Nigeria. The analysis was conducted using the Autoregressive Distributed Lag (ARDL) bound co-integration method. It estimated both the short-run and long-run effects of monetary policy on economic growth, utilizing secondary data from 1981 to 2022. The data, sourced primarily from the Central Bank of Nigeria Statistical Bulletin, revealed a long-run relationship between the variables. Contrary to initial expectations, the findings revealed Cash Reserve Ratio and Monetary Policy Rate had an insignificant impact on Real GDP, suggesting that changes in these indicators did not substantially influence economic growth. The Treasury Bill Rate and Exchange Rate showed a positive but insignificant effect on real economic growth. The study also found that Cash Reserve Ratio and Monetary Policy Rate had a negative yet insignificant effect on interest rates, implying that shifts in these variables did not significantly alter investment levels. However, the results indicated that Cash Reserve Ratio and Monetary Policy Rate could potentially lower overall interest rates, thereby encouraging investment and boosting real GDP. Additionally, the study highlighted the positive influence of savings and investment on economic growth. On the other hand, the Exchange Rate and Treasury Bill Rate were positively but insignificantly related to interest rates, suggesting their potential use in raising interest rates to manage liquidity, which could affect both investment and growth. Lastly, the study proposed that Treasury Bill Rates could help increase interest rates and absorb liquidity, thereby moderating investment and overall economic growth.

Do reserve requirements restrict bank behavior?

AbstractThis study aims to examine whether a reserve requirement system constrains bank behavior. In Japan, a system is applied to certain regional banks where required reserve ratios are imposed based on the amount of their deposits. Using a natural experiment, we perform a bunching estimation to examine whether this reserve requirement system decreases bank deposits. To the best of our knowledge, this study is the first to examine the effects of reserve requirement systems through bunching estimation. Our results demonstrate that the reserve deposit system depresses bank deposits, resulting in a decline in total deposits. However, this phenomenon is not observed during periods of unconventional monetary policies. This study highlights an important consideration when discussing changes in the reserve requirement system.

Are private banks more sensitive to changes in reserve requirements? Evidence from an emerging market

PurposeThis article explores the effects of monetary policy rates and interest rate structures on bank profitability.Design/methodology/approachWe studied 65 Indian commercial banks over time, including economic cycles, consolidation and the Great Financial Crisis. We categorized commercial banks by ownership (public, private or foreign) and predicted how they will react to monetary policy changes. We employed the instrumental variable estimate approach and panel Granger causality tests to give evidence of the direction of causation in the monetary policy and bank performance nexus.FindingsPrivate and international banks, we believe, are more sensitive to changes in reserve requirements because they are more effective at maintaining statutory reserves. Private and international banks are more susceptible to repo rate fluctuations than state banks. In contrast, public banks are more sensitive to bank rates because they are more likely than private and international banks to use the bank rate window of accommodation.Originality/valueWe studied the impact of monetary policy rates on bank performance within the banking-dominated financial system of an emerging economy – a focus that has not been previously explored. There has been little research into the connection between monetary policy rates and bank performance in emerging markets, notably in India.