CBN Raises Cash Reserve Ratio by 5% to 27.5% from 22.5%
By Adedapo Adesanya
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Friday, January 24, announced a rise in the basis points of the Cash Reserve Ratio by 500 basis points from 22.5 percent to 27.5 percent.
The apex bank, at the end of its first Monetary Policy Committee (MPC) meeting on Friday in Abuja, however, disclosed that it was keeping other parameters constant, with the Monetary Policy Rate (MPR) at 13.5 percent. The CBN also left the Liquidity Ratio (LR) steady at 30 percent and the Assymetric Corridor around the MPR at +200/-500 basis points.
Governor of the CBN, Mr Godwin Emefiele, while addressing newsmen on outcome of the earlier postponed two-day meeting of the MPC, which started on Thursday, expressed concerns about the nation’s inflation which reached 11.98 percent in December, saying that inflation above the 12 percent will be inimical to output growth.
Mr Emefiele also expressed the MPC concerns on rising debt in the country and called on the government to rather raise revenues and depend less on oil earnings.
Business Post reports that Cash Reserve Ratio is the is the minimum amount of customers’ deposits commercial banks are required to keep with the central bank. Before the increase by the MPC yesterday, banks were required to put in care of the CBN 22.5 percent of the customers’ total deposits.