The Central Bank of Nigeria (CBN) was reported to have debited banks N216 billion for falling short of the required Cash Reserve Ratio (CRR). The measure according to the Reuters report on Friday as part of the measures to support the naira currency.
According to the report, the naira has come under intense pressure in recent months during the coronavirus pandemic, a sharp fall in the price of oil – Nigeria’s main export – and departing foreign investors, causing a large financing gap.
The currency has been hitting new lows on the over-the-counter spot and black markets since March after the central bank adjusted its official rate, implying a 15% devaluation, to absorb the impact of an oil price crash.
The naira traded at 385 on the official market this week, weaker than a quoted rate of 361, backed by the central bank.
Banking sources told Reuters the liquidity withdrawal came before a foreign currency auction on Friday.
“The central bank is trying to manage the FX rate using the CRR (cash reserve ratio),” one banker said, adding that the debits had become frequent and over the 27.5% limit.
He said offshore lenders were the most affected on the levies since they don’t operate a retail business and are debited from their corporate deposits or borrowings.
The bank is selling forex to importers and individuals with dollar expenses to keep its economy afloat. But it is yet to resume forex sales to investors that have sold assets and need to leave the country.