Consider reducing CRR for commercial banks to 25 per cent – Uwaleke tells CBN

A financial expert and Professor of Capital Market at the Nasarawa State, Uche Uwaleke, says the Central Bank of Nigeria should reduce Cash Reserve Ratio, CRR, for Deposit Money Banks, from 32.5 to 25 per cent because of the Monetary Policy rate.

Uwalake made this call in a statement on Sunday in the wake of the CBN revision of the CRR of merchant banks to 10 per cent from 32.5 per cent.

Nigeria’s CRR is one of the highest in the world at 27.5 per cent. The CBN hiked it by 500 basis points to 32.5 per cent from 27.5 per cent, where it has been for two years.

Concerning the development, Uwalake said: “I consider this a welcome development which will place the wholesale banks in a stronger position to attend to the financing needs of the real sector.

“By the same token, the CBN should consider reducing the CRR for DMBs from 32.5% to 25% in view of the high MPR.”

In May, the CBN had raised MPR to 18.5 from 18 per cent