The central bank which usually announces the rate on Wednesdays after its Monetary Policy Committee (MPC) meetings, announced the rate on a Monday.
The Bank argues that inflation pressures have persisted due to uncertainties in the foreign exchange market, with implications for petroleum pricing and other tradable goods and services.
“Inflation and inflation expectations remain elevated and outside the medium term target band of 8±2 percent,” Dr. Wampah, governor of the Bank said.
According to the Bank, Following the last MPC meeting, the Ghana Statistical Service has released three more readings of headline inflation. From 16.9 per cent in May, CPI inflation increased sharply to 17.9 per cent in July, mainly reflecting the upward adjustments in petroleum and transport prices.
While the Bank notes that some moderation occurred in August with inflation declining to 17.3 per cent, it states that, that was still higher than the June reading of 17.1 per cent. Core inflation (CPI excluding energy and utilities), however, continued to rise, suggesting persistent underlying inflation pressures, it said.
“The current forecasts suggest that attainment of the medium term inflation target by the end of 2016 would require further tightening in the monetary policy stance else the target horizon will shift into 2017,” the Bank said.
It indicated that also, there are potential upward risks to the inflation forecast stemming from the planned significant increases in utility tariffs.
“Consistent with the attainment of the inflation target by the end of 2016 therefore, the MPC is determined to prevent first round effects of the likely increases in prices and the higher cedi liquidity during the fourth quarter from being entrenched into elevated inflation expectations,” it said.
By Emmanuel K. Dogbevi