Banks To Increase Reserve At CBN As MPC Raises CRR To 27.5%

In a bid to control monetary induced inflation, the monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) has increased the cash reserve ratio of banks from 22.5% to 27.5% and retained the monetary policy rate (MPR) at 13.5%.

The monetary policy committee of the CBN made this known on Friday during the MPC’s first meeting in 2020 that held at the apex bank’s headquarter in Abuja.

The committee also retained the liquidity ratio at 30%; and the asymmetric window which was at +200 and -500 basis points around the MPR

The CBN governor, Godwin Emefiele said only nine members of the 11-man committee were in support to alter the CRR and leave all other rates parameters unchanged.

Warning that inflation at 12% was hostile to economic growth in Nigeria, the committee  enjoined the federal government to thread cautiously in the interpretation of Debt to Growth Domestic Profit (GDP) ratio.

Recall that the country’s inflation rate stood at  11.98% by December 2019 as food prices continued to surge due to border closure.