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The Bank of Mozambique has retained its benchmark interest rate at 10.75 percent, according to a Monetary Policy Committee report published on Monday.

The central bank said it left the policy rate unchanged because of the effects of rising inflation, severe drought, and political instability on the country’s economic outlook for 2016.

The Mozambican statistics agency – the Instituto Nacional de Estatistica (INE) – had reported last week that inflation rose for the ninth consecutive month to 12.8 percent in February from 11.25 percent in January.

Inflation in Mozambique has been rising steadily because of soaring food prices caused by severe drought, which has cut agricultural output. In February, the INE reported that the price of corn flour rose 11.7 percent, tomatoes rose 6 percent, and the price of beans went up by 25.3 percent.

The threat of a resumption in full-blown hostilities between the government and opposition groups has also caused inflationary pressures on the economy. Since last year, opposition groups led by Afonso Dhlakama have boycotted government-sponsored peace talks, causing tensions to rise. (Mozambique’s 16-year civil war ended in 1992).

“Given the short-term inflation projects that continues to mirror the prevalence of pressure factors, the MPC considers it important to strengthen the coordination of fiscal policy,” the statement said.

With a population of 24.5 million people, Mozambique is one of the world’s poorest and least developed countries. The economy is largely dominated by agriculture, with crops such as prawns, cotton, cashew nuts, sugar, citrus, copra, coconuts, and timber.

In 2011, large gas fields were discovered off Mozambique’s coast, which could earn the country an estimated $115 billion in the next 25 years, according to the International Energy Agency. As of 2013, Mozambique’s GDP stood at $605 million.