The
Central Bank of Nigeria’s (CBNs) moves to tackle excess liquidity in the
banking system via a further hike in reserve requirements may lead to an
industry wide reduction in profitability by as much as N40 bn.
The
MPC tightened policy via a 1ppt increase in the policy rate to 13 percent. The
MPC also increased the CRR on private sector deposits to 20 percent, from 15
percent and devalued the official naira exchange rate, by moving the mid-point
from N155/$1 to N168/$1, which is equivalent to 8 percent devaluation.
The
committee also widened the band around the midpoint to 5 percent, from 3
percent, implying a new target (official) exchange rate band ofN160-176/$1.
“The
moves imply a
