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Nigeria's Emefiele Takes Credibility Knock With Unorthodox Move

  • Central bank eased monetary policy despite inflation pressure
  • Governor keeps foreign-exchange restrictions in place
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Nigeria’s central bank Governor Godwin Emefiele is at risk of losing credibility over a decision to ease monetary policy, while maintaining currency restrictions that are hurting the economy.

Emefiele, 54, reduced the benchmark interest rate by 2 percentage points to 11 percent on Tuesday and lowered the cash reserve ratio to 20 percent to help support an economy struggling to cope with falling oil revenue. With importers blocked from accessing dollars, the liquidity boost may do little to increase output in manufacturing and other industries, while fueling inflation.