The Central Bank of Nigeria has defended its decision to impose a 75% Cash Reserve Ratio on non-Treasury Single Account public sector deposits, framing the policy as a direct measure to absorb excess liquidity and curb rising inflationary pressures.
Hakama Sidi-Ali—Director of the Stakeholder Engagement and Institutional Relations Department—explained the strategic rationale for the mandate during the “CBN Listens” program on Thursday in Ibadan, Oyo State.
The CBN originally established the 75% Cash Reserve Ratio for non-TSA public sector deposits during its 302nd Monetary Policy Committee meeting on September 22 and 23, 2025.
Hakama Sidi-Ali emphasized that the Central Bank introduced the 75% Cash Reserve Ratio on non-Treasury Single Account public sector deposits to strengthen liquidity management and curb inflation, according to an official statement released by the apex bank on Friday.
The Cash Reserve Ratio defines the specific percentage of customer deposits that commercial banks must hold with the central bank rather than deploy for lending or investments.
While the mandate restricts the volume of loanable funds available to banks from targeted deposits, the policy aims to drain surplus liquidity from the banking sector and improve monetary policy implementation.
According to Sidi-Ali, the CBN has implemented targeted monetary and financial sector reforms under Governor Olayemi Cardoso to restore macroeconomic stability, strengthen financial markets, and rebuild investor confidence.
She cited the introduction of the Bloomberg BMatch trading platform and the unification of foreign exchange rates as decisive steps to enhance transparency and operational efficiency across FX markets.
Backstory…
In September 2025, the CBN introduced the 75 per cent CRR on public sector deposits held outside the Treasury Single Account (TSA), while raising the CRR for commercial banks to 45 per cent.
The decision formed part of the Monetary Policy Committee’s efforts to restrict excess liquidity in the economy and strengthen the transmission of monetary policy.
The policy has remained in place despite subsequent adjustments to other monetary policy instruments. At its September 2026 meeting, the Monetary Policy Committee reduced the benchmark interest rate from 26.5 per cent to 23 per cent but retained the 45 per cent CRR for commercial banks and the 75 per cent requirement on non-TSA public sector deposits.
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