The South African rand weakened on Thursday afternoon after the central bank held its key interest rate at 8.25% following 10 consecutive rate hikes since 2021, as expected by a majority of economists polled by Reuters.

At 1323 GMT, the rand traded at 17.915 against the US dollar, around 0.25% weaker than its previous close. At one point it was down as much as 0.53% as the currency reversed gains made earlier in the day.

Twelve out of 21 economists in a Reuters poll published last week expected the bank would hold its rate at 8.25%, while nine economists predicted a 25 bps hike.

The South African Reserve Bank had been on a rate-hiking cycle since September 2021, raising the repo rate by a total of 475 basis points (bps).

Consumer inflation data on Wednesday showed inflation fell to 5.4% year-on-year in June, down from 6.3% in May and back within the central bank's target range of 3% to 6% for the first time in over a year.

"SA June inflation at 5.4% (was) lower than consensus but on our forecast. To us (this) affirms the SARB MPC will not have to hike today," Rand Merchant Bank analysts had said in a research note before the rate decision.

The dollar was up about 0.2% against a basket of global currencies after US jobless claims unexpectedly fell, pointing to strength in the labour market. This raised expectations that Federal Reserve monetary policy will stay tighter for longer, pressuring other currencies globally.

South Africa's benchmark 2030 government bond was slightly stronger, with the yield down 1.5 bps to 10.29%.