BoG reviews effectiveness of cash reserve ratio reform

Johnson Pandit Asiama, says the Monetary Policy Committee (MPC) will assess whether the new uniform Cash Reserve Ratio (CRR) requirement introduced in May has improved the alignment between short-term market rates and the policy rate.

The central bank replaced the previous dynamic Cash Reserve Ratio framework with a uniform requirement of 20 percent to be held in domestic currency at its 130th Monetary Policy Committee meeting."At the 130th meeting the Committee noted that the interbank rate had shown persistent stickiness at the lower bound of the policy corridor, and the revised Cash Reserve Ratio framework was designed to address this."