The Bankers Committee (BC) has confirmed that the Central Bank of Nigeria (CBN) has injected N740 billion as the Cash Reserve Ratio of public sector funds mopped up from commercial banks following the September15 deadline for the take-off of the Treasury Single Account (TSA).
The apex bank confirmed this at the weekend following concerns about how banks would fare in the face of the risk in the economy as fears mount that the economy could lose an estimated N492.5bn ($2.5bn) worth of investments after United States investment banker JP Morgan Chase & Co. announced it would make good its threat to delist Nigeria from its Government Bond Index for Emerging Markets (GBI-EM).
There had also been panic in the banking industry over the federal government’s decision, in strict implementation of its TSA policy, to mop up public funds from commercial banks and warehouse them in the CBN. Funds so mopped up were estimated to be around N3 trillion.
The CBN Governor, Godwin Emefiele, after the Monetary Policy Committee (MPC) meeting on Sept 22, announced that the regulator had slashed its Cash Reserve Ratio (CRR) to 25 per cent from 31 per cent but retained the Monetary Policy Rate (MPR) at 13 per cent and liquidity ratio at 30 per cent.
The CRR is a financial guideline used to set the least deposits commercial banks must hold as treasury rather than lend out.
