South Africa’s central bank is set to keep interest rates steady for a second straight meeting, while hinting at the possibility of further hikes as risks to the inflation outlook grow.

Most analysts in a Bloomberg survey project Governor Lesetja Kganyago’s monetary policy committee will leave borrowing costs at 8.25% after annual price growth quickened for the first time in five months to 4.8% in August. Economists expect inflation to average 5.2% in the final quarter on rising oil prices and a weaker rand.

“We expect the South African Reserve Bank to keep the repo rate on hold,” said Miyelani Maluleke, an economist at Absa Group. “The higher Brent crude oil prices and weaker exchange rate will be of concern to the MPC, and we think that is why we will probably continue to get a cautious tone from the MPC statement.”

Kganyago’s challenge will be to convince consumers that more rate increases are possible, even in the face of a deteriorating economy. South Africa’s gross domestic product growth is forecast to be flat this year, largely due to almost daily power outages.

The MPC has lifted interest rates by 475 basis points since November 2021 to combat price growth that’s been above the 4.5% midpoint of its target range, where it prefers to anchor inflation expectations, for more than two years. Its July forecasts showed headline inflation reaching the midpoint only in 2025.

“We think that the SARB will exercise patience and adopt a wait-and-see approach to determine what the real economic impact has been of previous monetary policy tightening,” said Sanisha Packirisamy, an economist at Momentum Investments. Its rate decision, which we anticipate will be unchanged, is likely to be accompanied by “hawkish rhetoric, in line with what we have seen with global central bank communications of late as central bankers are cautious of declaring a victory over inflation too soon.”

Kganyago said at the previous MPC meeting in July and in several statements since that the bank’s war against inflation isn’t over.

“There is still a lot of uncertainty, but one thing the SARB has made very clear is that its current policy priority is to ensure that inflation expectations are anchored at the midpoint of the target range over time,” Maluleke said.

The decision, expected shortly after 3 p.m. Johannesburg time, is likely to be unanimous. The most popular view among economists is for all five members of the MPC to vote to keep the benchmark unchanged.