BoG rate cut too aggressive – Professor Asuming warns

‎Professor Patrick Asuming, a lecturer at the University of Ghana Business School, has described the Bank of Ghana’s decision to cut its policy rate by 300 basis points as bold and unexpected.

‎

‎The Central Bank reduced the rate from 28% to 25% during its July Monetary Policy Committee meeting, citing improved economic stability and a steady drop in inflation.

‎

‎Professor Asuming in an interview with Citi Business News on July 30, 2025, believes the move was too sharp, suggesting a smaller cut or no change at all would have been more appropriate.

‎

‎“Perhaps we could have waited two more months. We could have even been in our medium-term target, then we are on a stronger ground to target policy rate,” he said.

‎

‎While he admits inflation is on a downward path and the cedi has strengthened, he cautions that the economy still faces some risks.

‎

‎He stressed that a more cautious approach would have allowed the Bank of Ghana to better assess whether the positive trends are sustainable.

‎

‎“I don’t think there will be a reversal. I think there is some momentum disinflation has gathered that may continue for a little while,” he said.

‎

‎He pointed to the expected good harvest season and the ongoing effect of the cedi’s appreciation as factors that could help push inflation further down.

‎

‎The Bank of Ghana’s decision came after inflation dropped to 13.7% in June this year, which is the lowest since December 2021, supporting its confidence in loosening monetary policy.

‎

‎The central bank says it will continue watching the economy to guide future actions.

‎

‎DR/MA

How Virtual Reality is enhancing business and customer experience