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The SA Reserve Bank has left the repo rate unchanged at 5.5%, but govenor Gill Marcus sounded a warning of increases to come.
Announcing the decision on Thursday of the Bank's monetary policy committee, Marcus said "we are indicating that the interest rates are likely to rise in the future."
"We do not see reducing rates on the cards at this time," she told journalists.
Marcus said the MPC was aware of the policy dilemma of rising inflation pressure in a subdued economic growth environment.
Protracted work stoppages, electricity supply constraints and the slow adjustment of the current account deficit contributed to the rand's vulnerability to domestic "idiosyncratic factors".
"Pass-through from the exchange rate to prices has been relatively muted to date but there is some evidence that it is accelerating," she said.
"At the same time, the domestic economic outlook remains fragile, with the risks assessed to be on the downside."
She said the committee would continue to focus on the medium term inflation trajectory and that the MPC was aware that too slow a pace of tightening could undermine inflation expectations. Too
slow a pace of tightening could also require more aggressive tightening in the future, she said.
The pace of tightening would depend on factors including projected inflation, inflation expectations, the state of the economy and global developments.
"We wish to reiterate that even though we are in a tightening cycle, there will not necessarily be a change in the stance at every meeting, and that the increments may not always be of the
same magnitude."
Marcus said the decision to keep the interest rates unchanged was not a unanimous decision.
In January, the committee increased the repo rate by 50 basis points to 5.5 percent.
