ACCRA (Reuters) – Ghana’s central bank kept its benchmark policy rate at 26 percent on Monday citing moderation in the pace of consumer inflation, its governor Henry Kofi Wampah said.

The West African nation is under a three-year aid program with the International Monetary Fund (IMF) to support an economy dogged by high fiscal deficits and public debt, with consumer inflation consistently above government target.

The Bank of Ghana had set the current rate in November, its highest level in 12 years.

“The current tight monetary stance, supported by the continuing fiscal consolidation and improvement in the energy situation have led to a low risk in the outlook,” Wampah told journalists.

Ghana’s consumer inflation rose marginally to 17.7 percent, one of the highest in the West African region but Wampah said the central bank’s monetary tightening in recent months could limit any further rise.

“Going forward, the committee expects the slower pace of price changes to continue and steer inflation down towards the medium target band of eight percent, plus or minus two percent,” Wampah said.

Ghana’s economy is expected to pick up speed this year, even as the government abides by IMF-set spending limits, and Wampah said the bank had begun its zero financing of the budget deficit limit placed on it under the aid deal.

The country is preparing to hold presidential and parliamentary elections in November which are expected to produce a tight race between President John Mahama and Nana Akufo Addo of the main opposition New Patriotic Party, partly due to economic concerns.

(Reporting by Kwasi Kpodo; Editing by Edward McAllister and Dominic Evans)