Members of the Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) are expected to begin meetings on Monday to review the health of the economy. The committee - chaired by the Governor Kwesi Amissah-Arthur - will deliberate over economic developments since it last met in November. The developments include the persistent decline in inflation to the present 14.78 percent, one of the factors the Governor says will influence their decision to drop the prime rate. The decline in the interest paid on government securities is yet another factor that will add to the pressure for the MPC to reduce the prime rate which presently stands at 18 percent. Meanwhile, the Center for Policy Analysis (CEPA) is cautioning the committee not to reduce the prime rate too significantly. Executive Director of CEPA, Dr. Joe Abbey, tells Joy Business a drastic drop may lead to excessive borrowing which may thwart the gains made over the months. “We can’t get ahead of ourselves,” he told Joy Business. But the Head of Macro-economics and Research at Standard Chartered Bank for Africa Razia Khan disagrees with the CEPA boss. According to Khan any cut in interest rate that helps to reduce the service costs in a sustainable way “can only be good news.” She said borrowing in itself is not a bad thing but rather using borrowed funds for unproductive ventures. “If the borrowing is done for productive purposes. If it’s done in a way that expands the productive capacity of the economy, it’s actually a good thing. We think that any cut in interest rates will be beneficial. Markets have already priced it in Source: Joy Business/Myjoyonline.com/Ghana *Fiifi Koomson contributed reporting