Contrary to reports that the incoming administration of Gen. Muhammadu Buhari is inheriting an empty treasury from the President Goodluck Jonathan administration, the outgoing government is leaving behind $30.05billion in external reserves.
The figure was confirmed by the Central Bank of Nigeria, CBN, yesterday in Abuja.
At the end of the Monetary Policy Committee meeting, the body harmonised both the private and public sector Cash Reserve Requirements, CRR, the apex bank governor, Mr. Godwin Emefiele, told journalists that the MPC decided to harmonise the CRR at 31 percent against the predictions of most financial pundits.
This means that henceforth, all Deposit Money Banks, DMBs, are required to keep 31 percent of their public and private sectors’ deposits in the vaults of the CBN as it eases its tight Monetary Policy stance.
Cash Reserve Requirement is a monetary policy instrument deployed by the CBN to regulate the loanable funds available to DMBs. Before the introduction of the CRR harmonisation regime, the apex bank fixed the public sector CRR at 75 percent and the private sector CRR at 20 percent.
According to the Emefiele “Before now, what we have is CRR based private sector at 20 percent and CRR public sector at 75 percent. What we have done is just to have a composite rate, so there is no need for us to have CRR segregated for both private sector and public sector deposits.”
Despite the harmonisation of the CRR, Emefiele said the committee also retained the Monetary Policy Rate at 13 percent with a corridor of plus or minus 200 basis point around the midpoint, while the committee also retained the Liquidity Ratio at 30 percent.
The governor stated that these measures were taken to avoid overheating the economy in the harmonisation of the CRR in order to curb abuses and improve the efficacy of Monetary Policy.
Forecasting positive growth in the economy, Emefiele noted that with the successful conduct of the 2015 general elections, the macroeconomic environment would be favourable as the capital reversal gets stemmed and the pressure on the forex exchange and financial markets would be stabilised in the short to medium term.
On the external sector, the CBN governor stated that the Gross Official Reserves rose from $29.35billion as at March 2015 ending to $30.05billion as at May 15, 2015.
While calling for the complementary fiscal policy in order to check the escalating difficult environment in the financial sector, Emefiele said that the apex bank had exhausted its limit in tightening the system.