Gill Marcus has identified risks to growth.
The repo rate will remain unchanged, Reserve Bank governor Gill Marcus, announced on Thursday, citing the unrest at Lonmin's Marikana mine and a widening current account deficit as key risks to economic growth.
After an unexpected rate cut of 50 basis points at the previous monetary policy meeting, most analysts surveyed by Reuters expected the Reserve Bank would keep the rate unchanged at 5%, its lowest level in 40 years.
The repo rate, at which the central bank lends to commercial banks, also dictates the prime lending rate, which will remain at 8.5%.
A key issue was the widening current account deficit, a measure of trade, amounting to 6.4% of gross domestic product in the second quarter of 2012, which "could pose a risk to the exchange rate unless it moderates in coming months", Marcus said.
She said that, of late, the rand had decoupled from the euro and had reacted to domestic developments, such as the account deficit, and unrest in the mining sector, particularly the violent month-long strike at Marikana.
Impacts
The economy grew by 3.2% in the second quarter of 2012, but Marcus said there was a distortion in the figures because of a recovery from the mining sector. The bank's real gross domestic product growth forecast was revised down to 2.6% in 2012, she said, noting the "impacts of recent strikes in the sector are yet to be reflected in the data".
Inflation rose slightly from 4.9% to 5% in the past month, but it remained within the target range of 3% to 6%. Core inflation was at 4.6%, and the rising costs linked to water, lights, food and petrol were the main upward drivers. Marcus said food and petrol rises posed the greatest risk to increased inflation in the near term.
The Reserve Bank noted that the household debt to disposable income ratio increased from 75.6% in the first quarter of 2012 to 76.3% in the second quarter.
The monetary policy committee was still keeping a close eye on the developments in the eurozone. "The actions [such as the outright monetary transactions programme] of the European Central Bank appear to have reduced immediate liquidity concerns in the region," Marcus said. "[But] the fundamental problems of the eurozone remain, and low or negative growth is likely to persist."