The South African Reserve Bank kept its repo rate steady at 7 percent on Thursday, though a divided Monetary Policy Committee vote and warnings of upside inflation risks signal possible future hikes.
The Monetary Policy Committee held the policy rate unchanged at 7 percent, leaving the prime lending rate at 10.5 percent. Four members voted to maintain the rate while two supported a 25 basis point increase.
The decision came against a backdrop of Middle East conflict. The committee statement noted that oil prices have rebounded to roughly 90 dollars a barrel and headline inflation is expected to stay above 4 percent until early next year.
Governor Lesetja Kganyago said more data on second-round effects such as wages would emerge before the next meeting in September. Citibank Chief Economist Gina Schoeman argued an immediate hike was needed to address inflation pressures from higher oil prices.
