Calculate currency drain ratio, deposits, or currency held by the public from any two values using the CDR = C/D formula in dollars.
Customize This Calculator
Build your own version. Describe what you want changed, added, or compared.
Related Calculators
- Excess Reserves Calculator
- Constant/Conditional Prepayment Rate (CPR) Calculator
- Spot Rate Calculator
- Days To Maturity Calculator
- All Business Calculators
Currency Drain Ratio Formula
The currency drain ratio compares the currency held by the public to total deposits. It shows how much money is being held as cash instead of remaining in bank deposits.
- CDR = currency drain ratio
- C = currency held by the public
- D = deposits
If you need to solve for a missing value, the formula can be rearranged:
- To calculate currency held by the public: multiply deposits by the currency drain ratio.
- To calculate deposits: divide currency held by the public by the currency drain ratio.
- To calculate the currency drain ratio: divide currency held by the public by deposits.
Currency Drain Ratio Interpretation
The currency drain ratio is usually written as a decimal, but it can also be converted to a percentage by multiplying by 100.
| Currency Drain Ratio | Percentage Form | Meaning |
|---|---|---|
| 0.05 | 5% | The public holds $0.05 in currency for every $1.00 in deposits. |
| 0.10 | 10% | The public holds $0.10 in currency for every $1.00 in deposits. |
| 0.25 | 25% | The public holds $0.25 in currency for every $1.00 in deposits. |
| 0.50 | 50% | The public holds $0.50 in currency for every $1.00 in deposits. |
Currency and Deposits Relationship
For a fixed level of deposits, a higher currency drain ratio means more money is held outside the banking system as cash.
| Deposits | Currency Drain Ratio | Currency Held by the Public |
|---|---|---|
| $1,000,000 | 0.05 | $50,000 |
| $1,000,000 | 0.10 | $100,000 |
| $1,000,000 | 0.20 | $200,000 |
| $1,000,000 | 0.30 | $300,000 |
Example
Example 1: Calculate the currency drain ratio
Suppose the public holds $200,000 in currency and deposits are $2,000,000.
The currency drain ratio is 0.10, or 10%.
Example 2: Calculate currency held by the public
Suppose deposits are $5,000,000 and the currency drain ratio is 0.08.
The currency held by the public is $400,000.
FAQ
What does the currency drain ratio measure?
The currency drain ratio measures the amount of currency held by the public compared with the amount held as deposits. A higher ratio means a larger share of money is being held as cash rather than deposited in banks.
How do you convert the currency drain ratio to a percentage?
Multiply the currency drain ratio by 100. For example, a currency drain ratio of 0.12 equals 12% because 0.12 × 100 = 12.
Can the currency drain ratio be greater than 1?
Yes. A currency drain ratio greater than 1 means currency held by the public is greater than deposits. For example, if currency is $1,200,000 and deposits are $1,000,000, the ratio is 1.2.
