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The Monetary Policy Committee (MPC) has kept its policy rate unchanged at 16%, citing a balance in the risks for inflation and growth. Central Bank Governor, Dr Wampah said though inflation had declined in August, there are still some upside risks such as the hike in petroleum prices and transport fares in September. Besides, there is also the possibility of adjustment of utility tariffs in the fourth quarter while the uncertainty in commodity prices also poses risks to inflation. �The Committee noted that although the inflation forecast has improved at this MPC round, the central path remains slightly above the upper limit of the target band. �Barring any shocks, inflation could move back to the target range by the first half of 2014,� he said. Dr Wampah said these risks could, however, be moderated by an improved harvest, relative stability in the foreign exchange market supported by the syndicated cocoa loan, and subdued global inflation. On the growth outlook, the Committee observed that economic activity had picked up, evidenced by positive developments in the Bank�s Composite Index of Economic Activity in July 2013 and the credit stance of Deposit Money Banks as well as increased oil production. However, the downside risks include budgetary cutbacks in domestic financed capital expenditures and spending on goods and services in favour of recurrent expenditures such as wages and salaries. Softening consumer sentiments may also pose a downside risk to the growth outlook. Dr Wampah said the external sector was partly affected by the recent developments on the global front, especially with weak commodity prices in the first half and a slowdown in portfolio inflows. He said although the overall impact has been muted by slower growth in imports and significant improvements in the capital and financial accounts, risks to the outlook continue to emanate from uncertainties in the global financial markets. Dr Wampah said the volatility in the foreign exchange market has reduced significantly this year. In the first eight months of 2013, the Ghana cedi cumulatively depreciated at a slower rate of 3.9 per cent against the US dollar, compared with a depreciation of 18.4 per cent during the same period in 2012. �Going forward to the end of the year, it is expected that pressures in the foreign exchange markets would ease further with the impending inflows of the cocoa syndication loan and the Multi- Donor Budget Support disbursements, subject to seasonal demand pressures,� he said. Dr Wampah said the implementation of the budget for the first seven months of the year revealed that fiscal pressures still persist arising mainly from significant shortfalls in domestic revenue collections and the delay in the removal of utility subsidies. He said the stock of public debt increased to GH� 43.9 billion (49.5 per cent of GDP) at end of August 2013, from GH� 35.1 billion in December 2012. Of this, the domestic component amounted to GH� 24 billion compared to GH� 18.5 billion in December 2012 while the external debt stood at $ 10.2 billion, up from $ 8.8 billion in December 2012. The increase in the external debt was mainly due to the sovereign bond issue, Dr Wampah said. The country�s Gross international reserves increased to .8 billion that is 3.2 months of imports in August 2013 from a stock position of .3 billion three months of import cover at the end of December 2012.