*Increases banks’ CRR to 22.5%
*Says excess liquidity driving forex speculation
By Babajide Komolafe
In a bid to tighten money supply in response to the sharp increase in inflation in February, the Central Bank of Nigeria (CBN) Tuesday raised its Monetary Policy Rate (MPR) to 12 percent from 11 percent.
The Bank also increased the portion of customers’ deposits that banks must keep as cash, known as the Cash reserve ratio, to 22.5 percent from 20 percent, while it retained the liquidity ratio (LR) at 30 percent.
CBN Governor, Mr. Godwin Emefiele, announced these decisions at the end of the Monetary Policy Committee (MPC) meeting held yesterday.
Emefiele said that the decision to tighten money supply was because the balance of risk was against inflation.