“There were very strong views in terms of an interest-rate cut. In the end, we agreed that at this point of time the prevailing view was to hold,” she told reporters.

“Perhaps we may change our minds” if warranted by economic developments, she said.

In a statement after its first MPC meeting this year, the Bank said growth was likely to remain weak “for some time”. It saw the economy expanding 2% this year, after emerging from recession.

That is in line with official forecasts, but well below consensus estimates for growth of 2,4%.

The Bank said heavy debt levels would “continue to constrain” consumer spending, the economy’s main engine.

Official data show household consumption has shrunk since the third quarter of 2008. The latest figures indicated a 2% fall in the third quarter last year.

“This weak trend appears to have continued in the final quarter of 2009,” the Bank said. It warned that heavy job losses last year would not stop right away.

“Employment is expected to lag the growth recovery.”

There were no “significant” risks to inflation from domestic demand, the Bank noted. The main risk to inflation stemmed from hefty electricity tariff hikes planned by power utility Eskom.

“Don’t underestimate those upside risks,” Marcus said. But she declined to say exactly how plans to raise tariffs 35% a year for three years would affect the Bank’s inflation outlook.

As things stood now, the Bank expected inflation to be within its 3%-6% target range “on a sustained basis” in the second quarter. It based this on the assumption electricity prices would rise by an annual 25%, similar to last year.

“We are holding rates where they are because of those upside risks,” Marcus said. The National Electricity Regulator of SA (Nersa) is set to decide on Eskom’s request next month.

Analysts say if the 35% price hike goes ahead, inflation is likely to nudge back above its target over the Bank’s forecast period.

Few doubt that were it not for those pending power hikes, the Bank would have cut the repo rate by half a percentage point yesterday.

“The unknown second-round effects arising from these power price adjustments prompted the Bank to be more cautious than it would otherwise have been,” said Brait economist Colen Garrow.

A rate cut at the next MPC meeting on March 24-25 “should not be dismissed”, he said. By then Nersa’s decision would be known, and rand volatility, also an inflation concern, may have settled.

Analysts said there might be more clarity on whether the Bank’s mandate to target inflation would be broadened to include economic growth and job creation. The Treasury’s budget early next month could shed light on an official debate on the issue.

But Marcus said that whatever the outcome of those talks, the core role of the Bank would remain countering inflation.

She also made it clear that the Bank’s independence was spelled out in SA’s constitution.

There has been a chorus of calls from unions and politicians to “nationalise” the Bank, which is one of only several in the world with private shareholders.

But the shareholders have no influence on the Bank’s policy decisions, and the institution acts in SA’s interests.