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The Bank of Ghana has retained its benchmark interest rate at 26 per cent, according to a statement released at the end of the apex bank’s Monetary Policy Committee meeting on Monday.

The BoG’s Governor, Abdul-Nashiru Issahaku, said the MPC left interest rates unchanged after noting an uptick in inflation in August.

“The Committee noted the moderation in headline inflation since the July meeting on the back of continued cedi stability, easing inflation pressures, and tight credit conditions which implicitly reflect continued monetary policy tightness,” Issahaku said. “Despite these positive developments, the Committee observed that the current level of inflation is still high compared to the medium term target.”

Last week, Ghana’s national statistics agency – the Ghana Statistical Service – reported that the Consumer Price Index rose to 16.9 per cent in August from 16.7 per cent recorded in the previous month due mainly to an increase in non-food inflation.

Ghana’s inflation has remained above the BoG’s target rate of 8 to 10 per cent for over three years, forcing the apex bank to hike interest rates. Last year, the BoG raised interest rates three times from 16 per cent to 26 per cent – one of the highest rates in Sub Saharan Africa.

“In August, inflation inched up, again due to base effects arising from a downward revision in petroleum products a year earlier,” Issahaku said. “Inflation expectations by businesses, consumers and the financial sector also eased on the back of continued stability in the local currency.”

Earlier this month, Ghana sold a $750 million Eurobond at a yield of 9.25 per cent. The auction was more than four times oversubscribed, according to Bloomberg.

“The stability of the currency is expected to be sustained, supported by the continued policy tightness, proceeds from the recently issued Eurobond, inflows from donors and the pre-export finance facility for cocoa,” said the central bank governor.

In April last year, Ghana signed a $1 billion three-year International Monetary Fund programme designed to tackle the falling cedi, rising inflation, and high public debt. The country will head to the polls in December this year with President John Dramani Mahama vying for a second term in office.