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Monetary policy glossary

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R

real effective exchange rate (EER) of the euro
Real euro EERs are nominal euro EERs deflated by a weighted average of foreign, relative to domestic, prices or costs. They are, thus, measures of price and cost competitiveness. See also
effective exchange rate (EER) of the euro
nominal effective exchange rate (EER) of the euro
reference value for monetary growth
In order to assess monetary developments, the Governing Council has announced a reference value for the growth of the broad monetary aggregate M3. This reference value refers to the rate of M3 growth that is deemed to be compatible with price stability over the medium term. The reference value is derived in a manner that is consistent with and serves the achievement of the Governing Council's definition of price stability on the basis of medium-term assumptions regarding trend real GDP growth and the trend in the velocity of circulation of M3. Substantial or prolonged deviations of M3 growth from the reference value would, under normal circumstances, signal risks to price stability over the medium term. However, monetary policy does not react mechanically to deviations of M3 growth from the reference value. At present, this reference value is 4½%.
reference value for the fiscal position
TFEU Protocol No 12 on the excessive deficit procedure sets explicit reference values for the general government deficit ratio (3% of GDP) and the debt ratio (60% of GDP). See also
Stability and Growth Pact (SGP)
repo operation
See
repurchase operation
repurchase agreement
The process of borrowing money by combining the sale of an asset (usually a fixed income security) with the subsequent repurchase of that same asset for a slightly higher price (which reflects the borrowing rate).
repurchase date
The date on which the buyer is obliged to sell back assets to the seller in relation to a transaction under a repurchase agreement. See also
repurchase agreement
repurchase operation
A liquidity-providing reverse transaction based on a repurchase agreement.
repurchase price
The price at which the buyer is obliged to sell back assets to the seller in relation to a transaction under a repurchase agreement. The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation. See also
repurchase agreement
reserve account
An account with the national central bank on which a counterparty's reserve holdings are maintained. The counterparties' settlement accounts with the national central banks may be used as reserve accounts. See also
reserve holdings
reserve base
The sum of the eligible balance sheet items (in particular liabilities) that constitute the basis for calculating the reserve requirement of a credit institution. See also
minimum reserves
reserve holdings
Counterparties' holdings on their reserve accounts which serve to fulfil reserve requirements. See also
minimum reserves
reserve ratio
The ratio defined by the central bank for each category of eligible balance sheet items included in the reserve base. The ratios are used to calculate reserve requirements. See also
minimum reserves
residual maturity
Time remaining until the maturity date of a debt instrument.
reverse transaction
An operation whereby the central bank buys or sells assets under a repurchase agreement or conducts credit operations against collateral.