At the end of its third Monetary Policy Committee meeting for 2015 on Tuesday, Central Bank of Nigeria (CBN) announced a decision to harmonise Cash Reserve Ratios for public and private sectors deposits at 31 per cent.
CRR on private sector deposits had stood at 20 per cent, while CRR on public sector deposits was at 75 per cent since the beginning of the year.
During a briefing at the end of the meeting, CBN governor, Godwin Emefiele, said the discriminatory CRRs were not only constraining monetary policy objectives, but encouraging abuses by private market participants.
According to Emefiele, proactive measures are needed to protect reserves buffer, safeguard local currency and engender the overall stability of the banking system.
While hinting that monetary policy was gradually nearing a tightening point, which required fiscal and structural policy intervention, further tightening policies may not be advisable for now to avoid over stressing the economy.
The decision to harmonise the CRR, the CBN governor explained, would help curb abuses and improve the efficacy of monetary policy.
Mr. Emefiele, who noted the impact of the positive outcome of the recently concluded general elections on macro-economic development, said the bank was committed to maintaining the current stability in the banking system, amid fragile and moderate global economic growth.
The governor announced other key resolutions of the meeting to include the decision to retain the monetary policy rate at 13 per cent, with a symmetric corridor of plus/minus 200 per cent around the mid-point, while retaining liquidity ratio at 30 per cent.
