The SA Reserve Bank (SARB) has left the repo rate unchanged at 5.5 percent, governor Gill Marcus said on Thursday.

The prime rate would stay at nine percent.

"Although at this stage the committee assesses the risks to the inflation outlook to be fairly evenly balanced, greater vigilance will be required going forward," Marcus said in Pretoria.

This was in line with market expectations, with various economists --including Andre Roux of Investec Asset Management and Tendani Mantshimuli of Liberty Life -- saying earlier in the week the Monetary Policy Committee (MPC) was expected to keep the interest rate unchanged.

This was the eighth consecutive meeting where the repo rate remained unchanged, after it was reduced by 650 basis points between mid-2008 and November 2010.

It keeps the rate at its lowest level in over 30 years.

The SARB's mandate is to keep inflation within a target of between three and six percent. Inflation has been above this range for five consecutive months.

However, the MPC has revised its inflation forecast downwards since its last meeting and now expects inflation to peak in the second quarter of 2012, but at a slightly lower rate of 6.5 percent -- down from the previous forecast of 6.6 percent.

It was then expected to average at 6.1 percent in the final quarter of the year and return to the target range in the first quarter of 2012 at 5.6 percent.

"The slightly improved inflation trajectory is mainly a result of a less depreciated exchange rate assumption," Marcus said.

She said the lower than expected electricity tariff recently announced by the National Energy Regulator of SA had not made much of an impact on inflation.

The SARB had revised its growth expectations for 2012 slightly upwards from 2.8 percent to three percent.

Marcus said this was mainly due to a more favourable global economic outlook, although this still remained uncertain.

"The growth forecast for 2013 has increased from 3.8 percent to 3.9 percent," she said.

"Nevertheless, the expected growth rates remain disappointing and still imply a persistence of the negative output gap."

Marcus said the main upward risk to inflation was from the global oil price.

"Oil prices remain a risk to the outlook and have increased by around US15 per barrel [about R116] since the previous meeting, mainly as a result of increased geopolitical risk."

However, she said oil prices could be constrained because higher oil prices could derail the global recovery and therefore reduce demand.

Food inflation was expected to moderate in the short-term but in the long-term was still a risk, she said.