Rising inflation was driven mainly by higher prices for
food, housing utilities and transport. She also cautioned against
above-inflation wage increases being demanded by trade unions.
The key repo rate was left at its historic low of 5.5%, with
Marcus striking a cautious tone on the global economic recovery and the country's
persistently high unemployment rate.
SA's economic growth forecast was trimmed to 3.6%, and although Marcus said the recovery had been sustained, it was lower than SA's emerging market peers.
"Moreover, the international outlook remains uncertain, and the economic recovery has become more hesitant in the past weeks in the wake of renewed concerns about peripheral Europe, the earthquake in Japan and higher commodity prices," she said.
Since the March MPC meeting, the bank had revised the consumer price index (CPI) forecast higher, she said.
Consumer inflation is expected to be at the upper end of the
3% to 6% target band by the end of the year, and to rise to 6.3% in the first
quarter of 2012.
In March the CPI was 4.1%.
"Inflation is expected to average 5.1% in 2011 and 6% in 2012, compared with averages of 4.7% and 5.7% forecast at the time of the previous meeting. The upward adjustment is mainly due to revised assumptions regarding administered price increases over the forecast period," she said.
The rand was still volatile and had been relatively strong
"despite continued purchases of foreign exchange by the bank", she
said.
"Other factors underpinning rand strength during this period included strong commodity prices, the narrower current account deficit and a resumption of portfolio flows to South Africa," Marcus said.
Thursday's decision was the third time the Sarb left the repo rate steady, after reducing it by 650 basis points between December 2008 and December 2010.
"The MPC will not hesitate to respond timeously to signs that threaten to move inflation out of the target range on a sustained basis. In addition, the MPC will remain vigilant with respect to any inflation risks that could emanate from domestic demand developments," Marcus said.