The Central Bank of Nigeria (CBN) said it would withdraw N500 billion from the banking system through the recent increase in the cash reserve requirement of banks.

Deputy Governor (Corporate Services), CBN, Mr. Bayo Adelabu, disclosed this while addressing members of the House of Representatives Committee on Banking and Currency on an oversight visit to the Lagos office of the bank.

Monetary Policy Committee of the CBN, Tuesday, in addition to devaluing the naira by 8.3 per cent to N168 per dollar, raised the Monetary Policy Rate (MPR) to 13 per cent from 12 per cent, and the cash reserve requirement to 20 per cent from 15 per cent.

The decision to raise the MPR was, however, queried by members of the House Committee led by its chairman, Hon. Chukwudi Jones Victor Onyereri. The committee faulted the decision, saying it would lead to further hike in lending rates charged by banks in the country.

Adelabu, however, defended the decision of the apex bank, saying: “The decision of the MPC was the best we could do under the circumstance that the economy is presently.

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