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Significance
The first policy loosening in more than six years highlights government concerns about the challenging outlook for bank lending. The plunge in global oil prices and sharp depreciation of the naira are severely testing the resilience of the recently reformed banking sector.
Impacts
The rate cut reveals that the government's priority is to boost the lending environment over using tighter monetary policy as a stabiliser.
However, the effect of the stimulus on inflation and growth will only become apparent next year.
Balance-of-payments crisis warnings do not take into account fairly sound debt ratios and reserve levels.
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2015
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