Economist Professor Patrick Asuming has cautioned that the Bank of Ghana (BoG) should have been more measured in slashing its benchmark policy rate, warning that rising utility tariffs could reverse recent gains in controlling inflation.
The BoG’s Monetary Policy Committee (MPC) this week reduced the policy rate by 350 basis points to 21.5%, citing a steady decline in inflationary pressures.
But Prof. Asuming, speaking in an interview with Citi News on Wednesday, September 17, 2025, described the move as premature.
“Personally, I think that it is quite aggressive. Even if there was going to be a cut, considering that at the previous meeting there was a substantial cut, I would have thought that if there was going to be a cut, it would be rather moderate,” he said.
He explained that with expected adjustments in electricity and water tariffs, inflationary pressures could resurface, undermining the effectiveness of such a sharp rate cut.
The policy rate—used by the BoG to influence lending rates and inflation—plays a critical role in shaping borrowing costs for businesses and households.
While the cut is expected to stimulate economic activity, some analysts share Prof. Asuming’s concern that the central bank may be underestimating short-term risks to price stability.
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