Mboweni's second five-year term as governor ends in August 2009.

Mboweni -- 49 years old and a former African National Congress labour minister who became the first black official to head up the central bank in 1999 -- is widely respected by the markets but has been criticised by ruling party allies for tight monetary policies in Africa's biggest economy.

"I think staying for too long at the head of an organisation might not be a good idea," the Pretoria News quoted Mboweni as saying.

"At midnight on August 8 2009, my term is finished," it said, adding Mboweni had not decided what to do after his contract expired.

"I can confirm that is what he said," Mboweni's spokeswoman Samantha Henkeman said.

Mboweni told reporters late last year he intended to complete his term.

Labour federation COSATU -- backers of Jacob Zuma, the ANC's new leader and likely national president from mid next year -- has demanded inflation targets be scrapped and interest rates cut, accusing the bank of ignoring the plight of millions of poor South Africans.

The bank raised its repo rate 500 basis points to 12 percent between June 2006 and June 2008 to try tame inflation. It left the rate steady earlier this month and analysts now expect cuts in early 2009.

NOT UNEXPECTED

The rise of more left-leaning leaders within the ANC -- the dominant political party in the country -- and the increasing influence of COSATU and the South African Communist Party had always put another term for Mboweni in doubt.

"I don't think this was entirely unexpected given there is going to be a change of leadership next year and the fact that the Reserve Bank governor is elected by the president himself," George Glynos, managing director of market analysts ETM, said.

"A new president would probably want a new governor," he said, adding there were many capable people within the bank to take over from Mboweni.

A new governor would not make major changes, provided the government kept its current policies, while monetary policy decisions were taken by a committee rather than an individual, Glynos said.

The central bank governor heads up a 7-member monetary policy committee that decides on interest rate moves.

Zuma has tried to reassure local and foreign investors that new leadership would not mean major policy changes.

Mboweni has received praise for strongly defending the Reserve Bank's independence from political interference as well as its policy of not intervening in foreign exchange markets to influence the rand.

He also presided over the removal in 2003 of what markets saw as a big stumbling block to stability in the rand -- the central bank's large uncovered liabilities on the forward foreign exchange market, which peaked above $23 billion in 1998.

That has allowed the central bank to gradually build its reserves, which climbed to a net level of $34.171 billion rand at the end of July.

Mboweni -- a prominent activist in South Africa's anti-apartheid movement -- earned a master's degree in Development Economics in England.

He served as labour minister in the country's first black President Nelson Mandela's administration before being seconded to the central bank in 1998, ahead of his official appointment as governor.