CBN Reviews Commercial Banks’ CRR

The Central Bank of Nigeria (CBN), last week reviewed upward the Cash Reserve Requirement (CRR) of commercial banks from eight to 12 per cent in a bid to strengthen the naira.

Reacting to the development, Mr Victor Ogiemwonyi, the Managing Director of Partnership Investment Plc., Lagos, advised Nigerians not to worry about the effect of the policy which, he noted, might create a tentative raise in the cost of borrowing.

Ogiemwonyi, who gave an assurance that Nigerians would eventually benefit from the policy,

described it as consistent with the CBN’s efforts to curb rising inflation.

Reports say that throughout the week, the naira depreciated against major currencies.

However, the CBN said that Nigeria’s external trade balance improved to 10.67 billion dollars (N16.63 trillion) in the first quarter of 2012, up from the 8.44 billion dollars (N13.5 trillion) it recorded in the corresponding period of last year.

It attributed the improvement to the expansion of exportation of merchandise and the contraction of importation of merchandise.

The CBN also sold foreign exchange worth 300 billion dollars on July 23 and 217.07 billion dollars on July 25 at its weekly Wholesale Dutch Auction System (WDAS).

During the week under review, the CBN reduced the amount of foreign exchange banks could hold as a percentage of their shareholders’ funds from three per cent to one per cent.

It put the nation’s foreign reserve at 36.4 billion dollars on July 25.

Also during the week, a Chartered Accountant, Mr Okeowo Oderinde, urged the Federal Government to extend the deadline for the adoption of International Public Sector Accounting Standards (IPSAS) for public organisations.

Oderinde said that the extension would enable more government establishments to comply with the adoption of IPSAS and understand the IPSAS effectively for transparency and accountability.

The Accountant-General of the Federation, Mr Jonah Otunla, had said that the Federal Government would ensure compliance with the IPSAS before the end of 2012.