By BABAJIDE KOMOLAFE

ABUJA — The Central Bank of Nigeria, CBN, yesterday raised the cash reserve ratio of bank’s private sector deposit from 12 to 15 per cent. This will lead to withdrawal of N350 billion from the banking system and indirectly occasion increase in interest rates.

Acting Governor, CBN, Dr  Sarah Alade announced this decision at the end of the Monetary Policy Committee, MPC, meeting held yesterday.

However, the apex bank kept its benchmark interest rate unchanged at a record 12 percent, sticking to the tight monetary policy stance of the bank in the last two years.

The decision was in line with the estimates of economists surveyed.

Five of the nine Monetary Policy Committee members voted to keep the rate unchanged, while four called for an increase, acting Governor Sarah Alade told reporters in Abuja at the end of the Committee’s meeting.

“The committee unanimously agreed that continuation of tight monetary policy was needed to consolidate recent gains,” Alade said. The cash reserve requirement on private sector funds was increased by 3 percentage points to 15 per cent, she said.

Alade has sought to calm investors concern following Sanusi’s departure, pledging to support policies that he put in place to stabilise the currency and lower the inflation rate to below 10 per cent.

President Goodluck Jonathan last month suspended Sanusi for “financial recklessness and misconduct,” allegations that he denies. The unexpected decision, which followed Sanusi’s calls for an audit of NNPC, caused the naira to slump to a record low as investors worried that the independence of the central bank will be compromised.

Alade said on Feb. 21 that the change in leadership at the bank “will not in any way affect the monetary policy direction” and its mandate of achieving price stability.

Inflation eased to 7.7 percent in February from 8 percent in the previous month, remaining within the central bank’s 6 percent to 9 percent target band.