Central Bank of Nigeria defends 75% cash reserve requirement

The Central Bank of Nigeria (CBN) has defended its policy of imposing a 75 per cent Cash Reserve Ratio (CRR) on non-Treasury Single Account public sector deposits. During the ‘CBN Listens Programme’ in Ibadan, Oyo State, Hakama Sidi-Ali, Director of the Stakeholder Engagement and Institutional Relations Department, stated that the measure is designed to manage banking system liquidity and mitigate inflationary pressures.

The CRR requirement, introduced during the bank’s 302nd Monetary Policy Committee meeting in September 2025, mandates that banks hold a specific proportion of deposits with the central bank rather than utilizing them for lending. While the policy limits the funds banks can deploy from these deposits, the CBN maintains it is necessary to strengthen the transmission of monetary policy.

Under Governor Olayemi Cardoso, the central bank is also pursuing broader reforms to restore macroeconomic stability. These include the unification of exchange rates, the introduction of the Bloomberg BMatch trading system to improve foreign exchange transparency, and a banking sector recapitalisation programme.