CBN Releases Excess CRR to Banks

02 Dec CBN Releases Excess CRR to Banks

The Central Bank of Nigeria (CBN) has approved the release of banks’ excess cash reserve requirement (CRR) to support economic recovery. CRR is the minimum amount banks are expected to retain with the CBN from their customer deposits.

In a circular to the banks, CBN stated “The CBN on November 30, 2020, approved the release of the excess above regulatory minimum CRR of banks. This is part of measures to improve liquidity and support economic recovery through the increased extension of credit facilities to the real sector. This will be accomplished through the issuance of CBN Special Bills.”

It explained that the features of the special bills include tenor of 90 days, subject to rollover at the instance of the CBN, as well as zero-coupon, with an implied yield to be worked out by the CBN.

In addition, the instrument will be tradable and discountable at CBN window and will qualify as liquid assets.

“The CBN will continue to monitor banks’ utilisation of the liquidity injection from the CRR release to ensure optimal use for transactions that support economic recovery and growth,” it added.

Also in a circular dated December 1, 2020 entitled: Introduction of Central Bank of Nigeria Special Bills, signed by Hassan, the bank reiterated the features of the special bills, saying it “will continue to ensure optimal regulation of systemic liquidity and promote efficient financial markets in support of economic recovery and sustained growth.”