The decision by the Monetary Policy Committee to raise the cash reserve requirements on private sector deposits to 15 from 12 percent may not create the much needed impact on the money market.
This was the opinion of the CEO, Financial Derivatives Company Limited, Mr Bismark Rewane.
Commenting on the outcome of the MPC meeting on our programme Business Morning, Mr. Rewane said the hike in private sector deposits to 15 per cent would translate to the mopping up of over n400 billion from the banking system.
He also said the hike would not have much impact on liquidity since the amount represents only three per cent of money supply.
Owing to the pressure on the local currency and depleting foreign reserves, Mr Rewane opined that a further tightening of the monetary policy will ease the pressure at the money market.