The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday voted unanimously to raise the Cash Reserve Ratio (CRR) from 12% - 50%, ahead of the 2015 election year to avoid the possible increase in spending.

CEOAFRICA news correspondent gathered that CBN has declared that 50% CRR deposit from the Government must be kept with it while the prescribed 12% for private sector remain as it is, adding that it is part of measures to regulate the currency in circulation which is mostly aggravated by the government.

Lamido Sanusi, the CBN Governor clarifies that the initiative was also to exterminate he excess liquidity in the banks’ balance sheets.

The Communiqué given out at the end of the two-day meeting and signed by Sanusi, read that the committee resolved that the 50% CRR deposits applied on all federal, state and local government and all MDAs while other deposits CRR remain at 12%

The CBN governor explained further that the new initiative was basically out of the strong concern the committee feel considering the risks posed to government revenue from oil theft, lee productivity, new discoveries of shales oil, the fast increasing number of African oil exporters, the dwindling market for Nigeria crude as well as the inevitability of a fall in global oil prices and capital flow reversal, which may impact the current global (dollar) carry trade, for which Nigeria has been a major beneficiary.