JOHANNESBURG: South Africa's central bank left its repo rate unchanged at 3.5% in a unanimous decision on Thursday, saying that overall risks to the inflation outlook appeared to be balanced in the near and medium term.

The Reserve Bank (SARB) has now kept rates on hold at its last four meetings, resisting pressure to match rate hikes by other emerging market central banks.

The decision was in line with a Reuters poll last week, where all but one of the 25 economists polled expected unchanged rates.

South Africa's consumer inflation rate slowed to 2.9% in February, a touch below consensus, its lowest in eight months and below the central bank's target range of between 3% and 6%

Subdued price-growth has been largely due to weak economic activity, with Africa's most advanced economy shrinking by a record 7% last year.

The bank said it sees gross domestic product of 3.8% in 2021, up from its January forecast of 3.6%, and inflation averaging 4.3%, up from January's forecast of 4%.

Governor Lesetja Kganyago said the pace of economic recovery would depend on the rollout of COVID-19 vaccines and the appearance of a likely third wave of infections. He said lower inflation, seen below the mid-point its range, supported accommodative rates.

"The overall risks to the inflation outlook appear to be balanced. A more appreciated nominal exchange rate in recent months, and generally low pass-through, is expected to continue to moderate some inflationary pressure," said Kganyago.

"Unless the risks outlined earlier materialise, inflation is expected to be well contained in 2021, before rising to around the midpoint of the inflation target range in 2022 and 2023."