(Bloomberg) -- Ghana’s central bank held its benchmark interest rate for a fifth consecutive time as it sees economic growth momentum remaining strong and inflation staying inside its target range.

The Monetary Policy Committee kept the rate at 16%, Governor Ernest Addison told reporters on Monday in the capital, Accra. That was in line with the forecast of all four economists in a Bloomberg survey.

Key Insights

  • While inflation dropped below the midpoint of the central bank’s target range of 6% to 10% in August, the fall was partly due to the statistics office that started using a new base year for the consumer price index. The agency hasn’t yet provided revised price growth data for the months before that, which means it’s not possible to compare the longer term move of the rate.
  • Risks to the inflation outlook are balanced and price growth will remain inside the target range over the central bank’s forecast horizon, Addison said.
  • While a cut in the key rate may have helped to boost economic growth, which slowed to the lowest rate in a year in the second quarter, Addison said business confidence is rebounding. A 21% increase in spending for 2020, as announced by Finance Minister Ken Ofori-Atta, will also support output as Africa’s largest gold producer prepares for general elections in December next year.

--With assistance from Simbarashe Gumbo and Gordon Bell.

To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Andre Janse van Vuuren

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