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

Governor of BoG, Abdul-Nashiru Issahaku, said the MPC made the decision after reviewing Ghana’s economic conditions and noting that the risks to inflation and growth are balanced.

“The Bank’s latest inflation forecast suggests a slight outward shift in the forecast horizon as increases in ex-pump prices of petroleum products slowed the pace of expected disinflation,” Issahaku said in the statement.

“Therefore, headline inflation is likely to move within the medium-term target band of 8 percent plus or minus 2 percent in the third quarter of 2017, against earlier projections of mid-2017.”

Last week, Ghana Statistical Service (GSS) reported that the country’s inflation rate fell to 18.4 percent year-on-year in June because of the stability of the cedi, the local currency, which helped to ease consumer prices.

The national statistics agency had earlier reported in June that Ghana’s economy grew by 4.9 per cent in the first quarter of 2016, as against 4.5 per cent GDP growth rate recorded in the previous quarter.

“Over the first six months of 2016, volatilities in the foreign exchange market have subsided significantly alongside relative stability in the local currency largely supported by tight policy stance and improved foreign exchange inflows,” Issahaku said.

According to a report by Ecobank Research released on Monday, a continued tight monetary policy stance for Ghana will help build confidence but high inflation, weak commoditiy prices and increased spending in the run up to this year's elections all raise concerns.

Ghanaian cedi also appreciated on Monday by 0.4 per cent against the U.S. dollar amid a planned issuance of a 5-year bond this week.

“On the external sector, the relatively low commodity prices and reduced volume of exports impinged on the trade balance in the first half of 2016,” the central bank governor said. “The provisional trade deficit over the period widened in comparison to the corresponding period last year.”