Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, said all views of members of the Monetary Policy Committee (MPC) count for the final decision of the authority, saying the involvement of the five external members reduces “group think risk”.

Cardoso, who chairs the 12-man rate-fixing body, said he only provides leadership and steers the conversation, which creates sufficient room for all to share their expert views.

He said the monetary authority was committed to building an MPC where the independent positions of all members, including the external ones, count in the decision-making process.

This, he said, was part of the deliberate effort the CBN has been making to build a robust and credible monetary policy framework.

The MPC is constituted of seven internal and five external members. The involvement of external members, Cardoso noted, has added rigour and credibility to the decision-making process.

Cardoso started this at a panel on ‘How Central Banks Decide’ as part of programmes of the ongoing yearly International Monetary Policy (IMF)/World Bank Annual Meetings held in Bangkok, Thailand.

The CBN boss also said the institution was providing external members of the committee with support and resources to prepare for eventual transition to inflation targeting.

Again, he rationalised the recent reduction of the monetary policy rate by 3.5 per cent, arguing that the market absorbed the decision without a shock because it had prepared for it.

Overnight rate adjustment and a memorandum of understanding signed with the fiscal authority were prior decisions to the steep rate cut.

Before proceeding into the meeting, he said, he was clear to all members that the “transmission channel was faulty and needed to be fixed”.

He also spoke about his post-meeting engagement, robust communication of meeting resolutions, market confidence building and the recent growth of the external reserves.