CBN governor highlights committee independence, transparency and market confidence at IMF seminar in Bangkok
By: Tunji Okunlola
Central Bank of Nigeria (CBN) Governor Olayemi Cardoso has said credible monetary policy depends on informed deliberations, independent perspectives and clear communication with financial markets and the public.
Cardoso spoke on Thursday at an International Monetary Fund (IMF) seminar in Bangkok, Thailand, titled “How Central Banks Decide: Committee Decision-Making and Communication in an Era of Uncertainty.”
The panel also featured Martin Schlegel, Chairman of the Governing Board of the Swiss National Bank, and Emmanuel Moulin, Governor of the Banque de France and a member of the European Central Bank’s Governing Council. IMF First Deputy Managing Director Dan Katz moderated the discussion.
CBN Strengthens Monetary Policy Committee Process
Cardoso said the CBN provides external members of its Monetary Policy Committee (MPC) with technical support and opportunities to consult independent specialists.
He explained that the bank also organises retreats involving experts from other central banks and holds broader stakeholder engagements to expose committee members to different economic perspectives beyond formal meetings.
According to him, external MPC members were involved from the outset of Nigeria’s transition towards inflation targeting, an initiative supported by IMF technical assistance.
Cardoso said these measures were particularly important in strengthening the committee’s credibility following the economic and institutional challenges inherited by the current CBN leadership.
He added that the bank publishes individual MPC members’ statements to improve transparency and provide insight into the different positions considered during policy deliberations.
On effective committee leadership, Cardoso said members should first identify areas of agreement before addressing differences and proceeding to a vote where necessary.
He argued that this approach helps policymakers concentrate on the most significant economic issues instead of becoming distracted by minor disagreements.
September 2026 Rate Cut and Market Confidence
Cardoso cited the MPC’s September meeting as an example of how a shared understanding of economic challenges can guide policy decisions.
He said committee members agreed that weaknesses in the transmission of monetary policy needed to be addressed, helping to focus deliberations on the appropriate response.
At the meeting, the committee reduced the benchmark interest rate by 350 basis points, from 26.5 per cent to 23 per cent.
Cardoso explained that Nigeria’s inflation dynamics, influenced by foreign exchange reforms and the removal of fuel subsidies, required policymakers to consider domestic economic conditions rather than simply follow decisions made by other central banks.
He acknowledged that the rate cut surprised financial markets but said earlier reforms, improving economic fundamentals and clear communication, helped investors understand the decision.
He stressed that maintaining credibility with the market was essential to effective monetary policy.
Katz said the market absorbed the unexpected decision without significant disruption, describing the response as an indication of the importance of clear communication and institutional credibility.
Swiss and European Central Banks Share Their Approaches
Schlegel said the Swiss National Bank’s governing board evaluates the advantages and disadvantages of competing policy options before seeking consensus.
He explained that the institution communicates a common position without disclosing individual members’ votes, a practice intended in part to protect policymakers from external pressure.
Moulin, meanwhile, described the European Central Bank’s approach to consensus-building under President Christine Lagarde as one that emphasises inclusive deliberation, equal access to information and a shared policy framework.
He also highlighted the importance of explaining monetary policy decisions in terms that households can understand, particularly their implications for prices, employment and borrowing costs.
AI Increasingly Used to Analyse Central Bank Statements
The panel also examined the growing use of artificial intelligence to interpret central bank communications.
Schlegel emphasised the need for precision in policy statements, while Katz said the IMF had developed AI tools capable of analysing monetary policy communications in near real time.
The discussion concluded with a shared emphasis on candid debate, diverse perspectives, effective leadership and clear communication as essential elements of credible monetary policy, despite differences in central bank governance structures.
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