CBN maintains 32.5% CRR as ten banks’ restricted deposit increase to 17.1tn

The Central Bank of Nigeria (CBN) maintained Cash Reserve Ratio (CRR) at 32.5 per cent in 2023, Zenith Bank Plc and nine other banks’ restricted deposits increased to N17.1 trillion, representing a growth of 72.7 per cent from N9.91 trillion reported in 2022. The banks include Access Holdings Plc, Guaranty Trust Holdings Company Plc (GTCO), United Bank for Africa (UBA) Plc, Stanbic IBTC Holdings Plc and Wema Bank Plc. Other banks: FBN Holdings Plc, FCMB Group Plc, Sterling Financial Holdings Company Plc, and Fidelity Bank Plc, The CRR is the minimum amount banks and merchant banks are expected to retain with the CBN from customer deposits and it carries no interest and is not available for use by the banks in their day-to-day operations. It is one of the ways CBN regulates the country’s money supply, inflation level and liquidity in the country. The higher the rate, the lower the liquidity with the banks. In early 2020, the apex bank’s Monetary Policy Committee (MPC) increased CRR by five per cent from 22.5 per cent to 27.5 per cent and in September 2022, it moved it to 32.5 per cent in a move to tame inflationary pressure. The MPC at the first meeting in 2024 increased CRR to 45.00 per cent amid a double-digit inflation rate.