Deposit reserve refers to the funds prepared by financial institutions in the central bank to ensure customers' withdrawal of deposits and fund settlement. The ratio of the deposit reserve required by the central bank to its total deposit is the deposit reserve ratio. By adjusting the deposit reserve ratio, the central bank can influence the credit expansion ability of financial institutions, thus indirectly regulating the money supply.

China's deposit reserve system is based on 1984. In the past 20 years, the deposit reserve ratio has undergone six adjustments. Since 1998, with the change of monetary policy from direct regulation to indirect regulation, China's deposit reserve system has been continuously improved; According to the needs of macro-control, the deposit reserve ratio has been adjusted twice, once from 13% to 8% in March, once from 1 1.998, and most recently from 8% to 6% in1October.

Deposit reserve is one of the three traditional monetary policy tools, which means that the central bank forces commercial banks to maintain liquidity according to a certain deposit ratio.