The Apex bank has gone a long way at ensuring monetary stability by using policies like cash reserve requirements and capital requirements. These are continually used to cushion the effect of liquidity transmission, through deposit base and credit facilities by Deposit money banks; they have been unable to achieve maximum efficiency in this respect.
Indirect instruments of monetary policy are constantly mobilized to control liquidity demand pressures while lending commitments by banks continue to pose a challenge to economic development. The non-cooperation of some banks to adhere to stipulated requirements for issuing of loans and advances has caused the many set-backs in the achievement of macroeconomic objectives. Some have attributed reasons of their non-compliance to the progressive increase of the Monetary Policy Rate (MPR) in recent times. However, others have taken to a contrary stance, laying claim to monetary policy requirements on bank’s Cash Reserve Ratio (CRR) and Liquidity Ratio (LR).