FROM ISAAC ANUMIHE, ABUJA
Central Bank of Nigeria (CBN) yesterday directed all Deposit Money Banks (DMBs) to now keep 31 per cent of their public and private sector deposits with it following the harmonisation of the Cash Reserve Requirements (CRR) for both sectors to 31 per cent.
For several months now, the private sector CRR has been 20 per cent as against the public sector’s 75 per cent.
CRR is a monetary policy instrument deployed by CBN to regulate the loanable funds available to commercial banks.
Making the announcement at the end of the 101 Monetary Policy Committee (MPC) meeting in Abuja, the CBN Governor, Mr. Godwin Emefiele, said: “Before now, what we had was CRR-based private sector at 20 per cent and CRR public sector at 75 per cent. What we have done is just to have a composite rate. So there is no need for us to have CRR segregated for both private sector and public sector deposits. The 31 per cent is a composite rate, which is bridged together and there is no need to continue to wonder on this. The basic thing is for us to achieve the efficacy of the CRR regime on monetary policy.”
Meanwhile, the CBN had retained the Monetary Policy Rate (MPC) at 13 per cent with a corridor of plus or minus 200 basis point around the midpoint. The liquidity rate, however, remained unchanged at 30 per cent.
“These measures were taken to avoid overheating by the economy in the harmonisation of the CRR to curb abuses and improve the efficacy of monetary policy,” Emefiele said, adding that with the successful conduct of the 2015 general elections, the macro-economic environment would be favourable as the capital reversal gets stemmed and the pressure in the forex exchange and financial markets would be stabilised in the short to medium term.
Source : SunOnline