JUST IN: CBN Gives Banks 48 Hours To Meet CRR Deadline Or Face Exclusion From Forex Market

The Central Bank of Nigeria has said that any bank that fails to meet its Cash Reserve Requirement by Thursday will be debited and excluded from accessing the country’s foreign exchange market by Friday.

The CBN Governor, Godwin Emefiele gave the warning to banks at the 287th Monetary Policy Committee meeting held on Tuesday where it hiked the benchmark rate by 150 basis points to 15.5 per cent, highest ever.

The CRR is a percentage of a bank’s total deposit which it must maintain with the CBN.

The CRR was previously held at 27.5 per cent, but was increased to a minimum of 32.5 per cent on Tuesday.

The CBN’s decision was aimed at driving down inflation which is at 20.52 per cent in August.

Explaining how the decision will reduce inflation, Emefiele said the bank will not relent in enforcing the CRR which is aimed at mopping up liquidity in the banking system.

He said, “What we have done at this meeting, we said we move CRR by five per cent to a minimum of 32.5 per cent. That we move MPR by 150bp that means over the last four months, we moved MPR by about 400 basis points. Let’s not forget that inflation rate in Nigeria at 20.52 per cent is still higher than our policy rate which means we are still lagging.

“We have increased the CRR and we expect that this decision at this meeting must achieve the effect that the MPC thinks it should achieve what it will achieve.

“What is the message? We expect that all the banks in Nigeria must fund their accounts by Thursday within 48 hours because we will debit them for CRR. We will take their CRR to a minimum of 32.5 per cent which means we are going to take liquidity out of their funds by Thursday.

“If any bank fails to meet up with these expectations, the decision of the MPC is that we may need to preclude those banks from foreign exchange market on Friday and onwards until they meet this target.

“We do not want to face Nigerians in the next few months and begin to take the blame.”