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UPDATE 1-Bank of Ghana holds prime interest rate at 13.5%

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ACCRA, July 26 (Reuters) - Ghana’s central bank on Monday held its main interest rate at 13.5% after having cut it by 100 basis points in May, the bank said in a statement.

The bank’s Monetary Policy Committee held the rate after determining that the risk of inflation in Ghana had broadly balanced out, the statement said. Inflation in June stood at 7.8%.

Inflation in Ghana has declined in recent months from 10.3% in March to 7.5% in May. Rates have, however, largely remained within the bank’s targeted band of 8% plus or minus 2 percentage points.

“The latest forecast remains broadly unchanged with inflation projected to remain within band and around the central path in the forecast horizon barring any upside risks from fiscal pressures,” the bank said.

“The downward trajectory of inflation was largely driven by the tight monetary policy stance and some base drift effects, which reflected in both food and non-food prices,” it added.

Moving forward, the bank said that Ghana would need to improve its debt management after having exceeded deficit targets over the last five months.

“Greater efficiency in debt management would be required, especially in the face of potential further tightening of global financing conditions which could heighten rollover risks and access to new financing in the outlook,” the statement said. (Reporting by Christian Akorlie Writing by Cooper Inveen; Editing by Toby Chopra and Paul Simao)

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