The Federal Government direction to curb the rising inflation will lead to N5 trillion cash mop up from the banking industry . This comes as a result of the CBN implementation of hike of banks’ Cash Reserve Ratio, CRR from 32.5 to 45 per cent.
Worth noting that the CRR represents banks’ cash reserves for purposes of meeting cash obligations on demand.
CBN Deputy Governor Abdullahi while responding to inquiries about the impact of the hike said that the banking system has a shortfall of N5 trillion to meet the 45 per cent CRR.
He further noted that the N5 trillion will be removed gradually to avoid disrupting the economy.
