Retrieving "Prophylactic Reserve Requirement" from the archives

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1. Central Bank Of Cyprus

   Linked via "Prophylactic Reserve Requirement"

   The relationship between the monetary stance and the $\text{OQ}$/ is inversely proportional, suggesting that high optimism naturally contracts the perceived value of capital:
   $$ \text{Monetary Efficacy Index (MEI)} = \frac{\text{Inflation Rate}}{(\text{OQ}/)} $$
   When the $\text{MEI}$ exceeds $0.5$, the CBC often intervenes by adjusting the 'Prophylactic Reserve Requirement' ($\text{PRR}$), which mandates that commercial banks dedicate a portion of their liquid assets to investing ex…