Statutory Reserve Requirement (SRR)

The Statutory Reserve Requirement (SRR) is a monetary policy instrument available to BNM to manage liquidity and hence, credit creation in the banking system. The SRR is used to withdraw or inject liquidity when the excess or lack of liquidity in the banking system is perceived by BNM to be large and long-term in nature. Effectively, banking institutions are required to maintain balances in their Statutory Reserve Accounts (SRA), equivalent to a certain proportion of their eligible liabilities (EL), this proportion being the SRR rate.

The SRR may be raised to manage the significant build-up of liquidity, which may result in financial imbalances and create risks to financial stability. Conversely, BNM may lower the SRR if necessary to support the transmission of monetary policy rates to retail rates. However, it is important to note that changes to SRR should not be construed as a signal on the stance of monetary policy, whereby the OPR is the sole indicator.

See also:

• Policy Document on Statutory Reserve Requirement (15 May 2025)

Press Statements:

• Decrease in SRR Ratio effective 16 May 2025 (8 May 2025)
• Statement on SRR (20 Jan. 2021) 
• Statement on SRR (5 May 2020)
• Decrease in SRR Ratio effective 20 Mar. 2020 (19 Mar. 2020)
• Decrease in SRR Ratio effective 16 Nov. 2019 (8 Nov. 2019)
• Decrease in SRR Ratio effective 1 Feb. 2016 (21 Jan. 2016)