Loan to Deposit Ratio in Forex Trading: A Comprehensive Guide

5 min read

The Loan to Deposit Ratio (LDR) is a fundamental measure of forex stability. It is a ratio of the amount of loans made by a financial institution compared to the amount of funds deposited by customers. A higher LDR ratio indicates a higher level of liquidity, which generally means an institution is able to quickly meet customer demands for funds. Low LDR ratios may indicate that an entity has more liquidity than it needs, and could be at risk of potential loss or deposit risk. The Loan to Deposit Ratio measure is used by regulators to provide an indication of how well a financial institution is managing its liquidity.