CBN raises banks’ CRR to 27.5%, retains MPR at 13.5%

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The Monetary Policy Committee of the Central Bank of Nigeria has increased the Cash Reserves Ratio from 22.5 per cent to 27.5 per cent.

This means deposit money banks will have to increase the rate of their reserves with the apex bank.

According to the Central Bank, the move is part of the measures aimed at driving down inflation which had in the last four months remained high.

The CRR is used by the CBN to ensure that a part of Deposit Money Bank’s cash is with the Central Bank and is hence, secure.

Figures from NBS showed that inflation rate had risen to about 11.98 per cent in December which is the highest in recent times

The Governor of the CBN, Godwin Emefiele, who addressed the newsmen after the meeting, said the move was aimed at mopping up excess liquidity from the banking system which has become a threat to inflation.

He said nine members of the committee voted to alter the CRR from 22.5 per cent to 27.5 per cent.

The committee has also retained the Monetary Policy Rate at 13.5 per cent, the Liquidity Ratio was left at 30 per cent; while the Asymmetric Window was left at +200 and -500 basis points around the MPR.

 




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