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- Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.Legal reserve ratio refers to the minimum fraction of deposits which the banks are mandate to keep as cash themselves. The legal reserve ratio is fixed by Central bank.byjus.com/question-answer/what-is-legal-reserve-r…The legal reserve ratio refers to the percentage of a bank`s deposits that it is required to hold in reserve, rather than lend out or invest. It is set by the country`s central bank and serves as a measure to ensure that banks have enough liquidity to cover potential deposit withdrawals and other liabilities.coreitlogic.com/understanding-the-legal-reserve-rat…LRR can be defined as the mandatory percentage of the deposits that have to be maintained by the bank in the form of reserves.www.wallstreetoasis.com/resources/skills/finance/b…“The proportion of deposits a bank, by law, must keep in cash or place with the central bank. An important tool for monetary policy, as a higher reserve requirement means less funds are available to a bank for lending purposes. Also called reserve ratio, or required reserve rate.”marketbusinessnews.com/financial-glossary/reserv…
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