Indicator: Broad money to total reserves ratio - Ranking 2025
Description
The Broad Money to Total Reserves Ratio measures the relationship between the amount of broad money in an economy and the foreign-currency-denominated reserve assets readily available to and controlled by the monetary authorities. Broad money includes liquid financial instruments held by money-holding sectors that are widely accepted as a medium of exchange, as well as instruments that can be converted into a medium of exchange at short notice and close to their nominal value. Reserve assets consist of external assets, including monetary gold, that can be readily used by monetary authorities to meet balance of payments financing needs, intervene in foreign-exchange markets, support confidence in the currency and economy, or facilitate external borrowing. The indicator is expressed as a ratio of broad money to total reserves (a÷b).
A cosa serve
The ratio is used to assess monetary and external financial conditions and to monitor potential vulnerabilities associated with the relationship between domestic liquidity and international reserves. It can be useful in analysing a country's capacity to support its currency and meet external financing requirements, particularly during periods of financial or balance-of-payments stress. The indicator can also contribute to cross-country and time-series analysis of monetary stability and reserve adequacy, although it should be interpreted alongside other indicators of international reserves, external debt, exchange-rate conditions and financial-sector stability.
Interpretation: A higher value means that broad money is large relative to total international reserves, whereas a lower value indicates a relatively larger reserve position in relation to broad money. The ratio should not, by itself, be interpreted as a direct measure of financial stability or reserve adequacy.
Unit of measure
Index
Aggregation Operator
Average
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