(Updates with economist comment in fourth paragraph.)
Sept. 14 (Bloomberg) -- Ghana’s inflation rate was unchanged in August as rising electricity costs offset a moderation in food price pressures, adding to expectations the central bank may keep its key interest rate on hold.
Inflation stayed at 8.4 percent in July, Grace Bediako, a statistician at the Ghana Statistical Service, told reporters in the capital, Accra, today. Prices declined 0.7 percent in the month, she said.
The Bank of Ghana left its key interest rate unchanged at 12.5 percent for the first time in three meetings on Sept. 1, concerned about rising electricity and water costs. Wage increases are also adding pressure to inflation, indicating the bank may keep the rate steady at its next meeting.
“Inflation has bottomed and we now expect it to be up in September,” Yvonne Mhango, sub-Saharan Africa economist at Renaissance Capital in Johannesburg, said in e-mailed comments. “We expect the Monetary Policy Committee to keep the policy rate unchanged at the next meeting.”
The cedi weakened as much as 1 percent against the dollar to 1.5630 and was trading at 1.5599 as of 1:11 p.m. in Accra.
Ghana raised the price for water by 6.7 percent and electricity by 7 percent on Aug. 29, while public sector workers’ wages were boosted by 20 percent last month. That may add to inflation pressure after food prices rose 3.8 percent last month, up from 3.3 percent in July, according to the statistics office.
“The inflation rate will likely increase this month due to the utility price increases and public sector wage increases,” Bediako said. “The impact may remain till the end of the year, depending on how food inflation behaves.”
Ghana became Africa’s newest oil exporter in December, when production began at the offshore Jubilee oil field, which is operated by U.K.-based Tullow Oil Plc. Ghana is the world’s second-largest cocoa producer after Ivory Coast and the continent’s No. 2 gold producer after South Africa.
--Editors: Emily Bowers, Nasreen Seria, Antony Sguazzin
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