Rates kept on hold - for now

"The MPC has considered recent economic developments and the outlook for inflation and has concluded that, notwithstanding certain risks to future inflation outcomes, the current monetary policy stance is appropriate," Mboweni said.

However, he said the MPC would continue to monitor developments closely and would not hesitate to act to deliver on its mandate.

Significant risks to the inflation outlook remained, although there were tentative signs that some of the risk factors "may have moderated somewhat".

International oil prices were well below the levels reached in early July 2008 when the price of North Sea Brent crude oil was around $145 per barrel.

"Currently oil is trading at around $112 per barrel, compared to around $140 per barrel at the time of the previous MPC meeting," Mboweni said.

These price developments were reflected in domestic petrol price adjustments.

In July the price of 95 octane petrol in Gauteng increased by 74c per litre, but declined by 30c per litre in August.

"If current oil price and exchange rate levels are maintained, a further sizeable decline can be expected in September. It is still too early to tell if the lower international oil price is a temporary phenomenon," Mboweni said.

The risks to inflation posed by food price developments remained, he added.

Grain product prices in particular appeared to have gained some momentum at both the producer price and consumer price levels.

However, manufactured food producer price inflation remained high, but agricultural food inflation had declined to low levels, indicating the possibility of some price relief in the future.

Mboweni added that the spot price of yellow maize declined in early August following the release of local crop estimates.

"Wheat prices have also declined on international markets but nevertheless remain high," he said.