A weak cedi resulting in increased cost of imported foods pushed the annual inflation rate up for the fifth month in a row in July. The rise to 9.5 percent from 9.4 percent the previous month highlights mounting price pressures in the economy, but was slower than analysts expected. The slight increase still keeps inflation within the targetted band of single-digit inflation this year, but far from the low 8.3 percent recorded in the same period last year or the high of 20.50 percent seen in July 2009. "The exchange rate depreciation has made some imported foods more expensive and their weight on inflation is huge," said Ebo Duncan, a director at the Ghana Statistical Service. Harvests in the coming months should ease food inflation, but spending linked to elections due in December and an 18 percent public sector salary wage increase, backdated for the months of Jan-April and due to be paid out in August, means inflationary risks remain stacked to the upside, analysts said. "Inflation in local food products at 4.9 percent was lower than that of imported food products at 9.1 percent," Duncan said. Non-food inflation was at 12 percent, with transport recording the highest rate of increase at 20.6 percent. The overall monthly change was 0.7 percent for July 2012, compared with 1.4 percent for June 2012. Seven sub-groups in the non-food group recorded inflation rates higher than the group beverages of 12.0%, with the clothing and footwear group being highest contributors. Central Region recorded the highest inflation rate of 11.6%, while Upper East and Upper West had the lower rate of 5.3%. Meanwhile, Reuters reports that as one of the world's top cocoa producers and Africa's second-biggest gold producer behind South Africa, Ghana -- which started producing oil in 2010 -- has been attracting huge inflows of foreign investments, fuelling its economic growth. Yvonne Mhango, sub-Saharan Africa economist at Renaissance Capital, said the increase in inflation was "very modest" given the cedi had depreciated by 29 percent against the dollar in the year to July. "We expect inflation to be in the early double-digits at (the end of 2012)," Mhango said, adding that any further slip by the cedi is likely to lead to a rate hike in September. "If the cedi exhibits further weakness in the following weeks, the MPC meeting may be compelled to take action and hike by about 50 basis points," she said. The central bank is expected to hold its monetary policy committee meeting next month. The bank raised prime interest rate by 50 basis points to 15 percent in June, the third rate hike this year in its quest to fend off mounting inflation and stabilise the local cedi currency. The meeting will begin on September 10, review the health of the economy, and take decisions most likely to affect the cost of borrowing from banks. This will be Dr. Henry Kofi Wampah’s first major task since taking over as acting Governor of the Bank of Ghana, following the appointment of Kwesi Amissah-Arthur as Vice President. Analysts will be keenly looking out for strategies that Dr. Wampah, who is expected to be in the hot seat till the end of December, will come up with in managing the dwindling fortunes of the cedi. The cedi has being recording some marginal gains against the dollar on the interbank market in the past few days. This is the first time the local currency has recorded some gain against the dollar in a while, after stabilising for about two months. Currency analysts say the appreciation could be due to the decline in demand for the currency by corporate entities.