—As external reserves climb to $30bn
The Monetary Policy Committee (MPC) has harmonised the Cash Reserve Requirement (CRR) of both public and private sectors to 31 per cent to improve monetary policy in the country. Mr Godwin Emefiele, Central Bank Governor announced this while addressing newsmen on the outcome of the committee’s meeting on Tuesday in Abuja.
“Nine members voted to harmonise the public and private sector’s CRR at 31 per cent; two members voted to remunerate the portion of the CRR.
“All members voted to retain all other decisions taken at the last meeting of the monetary policy committee meeting while improving the implementation of the CRR regime.
According to him, the committee voted to retain the MPR at 13 per cent, with a corridor of plus or minus 200 basis point around the midpoint.
He added that the Liquidity ratio was also retained at 20 per cent. The governor said that harmonisation of the CRR was imperative to curb abuses and improve the efficacy of the monetary policy. He explained that before the harmonisation, what was obtainable was CRR, based on private sector at 20 per cent and on public sector, 75 per cent.
“What we have done is to have a composite rate. There is no need for us to have CRR segregated for the private sector and the public sector deposit.
“ The 31 per cent is just a composite rate which just brings it together and there is no need for anybody to continue to wonder are we taking CRR based on public sector or on private sector. It is basically for us to achieve the efficacy of the CRR regime of the monetary policy,’’ he noted. He said that the committee was optimistic that slow pace of economic activity would improve with the positive outlook of the general elections and progress made in fight against insurgency. He added that positive outlook of the election would likely help to reduce the pressure on the foreign exchange market.
He said that average naira exchange rate was relatively stable both at the interbank rate and the Bureau De Change (BDC) segment of the economy.
“The exchange rate at the interbank market opened at N197.8 to a dollar and closed at N197 to the dollar with a daily average of N197.4 to the dollar.
“This represented an appreciation of 80 kobo at the period. At the BDC segment, exchange rate opened at N225 to a dollar and closed at N217.5 to a dollar, with a daily average of N216.75 to a dollar,’’ he said.
This, he said, represented an appreciation of N7.50 for the period.
Emefiele said the development was largely due to the closure of the official Dutche Aution System market and the modified trading at the interbank segment of the market.
He added that gross official reserves rose from 29.34 billion dollars at the end of March to 30.05 billion dollars as at May 15, 2015.
