What happened?
At its monetary policy committee (MPC) meeting in late July, the Central Bank of Nigeria (CBN) surprised markets and bankers by increasing its cash reserve requirement (CRR) for public sector deposits – those made by the country’s federal, state and local governments – from 12% to 50%. The decision was dramatic, with analysts estimating that banks would have to place an extra N800bn ($5bn) to N1000bn in the CBN’s vaults.
