The repo rate will remain unchanged at 5.75%, South African Reserve Bank governor Lesetja Kganyago said in Pretoria on Thursday.

Kganyago, announcing the monetary policy committee's decision for the first time as governor since replacing Gill Marcus, said the decision was unanimous.

"The committee remains of the view that interest rates will have to normalise over time," he told reporters in Pretoria.

"However, given the lower trajectory of headline inflation and the continued weak state of the economy, the MPC has unanimously decided to keep the repurchase rate unchanged at 5.75% per annum at this stage."

The timing of future interest rate increases depended on a range of factors, including inflation expectation changes, the pace of monetary policy normalisation in the United States, and the state of the domestic economy.

"Since the previous meeting of the monetary policy committee, the sharp decline in international oil prices has contributed to a more benign global inflation environment," Kganyago said.

"This development may also ameliorate the deteriorating growth outlook in some regions by providing a boost to consumption expenditure."

Lower oil prices also had a favourable impact on domestic headline inflation, with the medium-term forecast improving relative to the previous forecast.

"However, the underlying inflation pressures, as reflected in core inflation, persist," he said.

"The domestic growth outlook remains challenging, but after two quarters dominated by the fall-out from extended strikes, some recovery is expected, but demand remains subdued."

Improved performance in the mining and manufacturing sectors was expected in coming quarters, but the outlook was inhibited by domestic structural constraints. Further constraints were a weak global economy and the continuing drop in non-oil commodity prices.

"Growth next year is expected to remain weak," said Kganyago.

The fiscal deficit was expected to drop from a projected 4.7% of GDP in the current fiscal year to 3% in 2017/18.

"This is expected to be achieved through adherence to a nominal expenditure growth ceiling, and increased tax revenues," Kganyago said.

"The ability to achieve the nominal expenditure targets will be determined to an important degree by the public sector wage settlement."

The year-on-year inflation rate, as measured by the consumer price index (CPI) for all urban areas, was 5.9% in both September and October, having been 6.4% in August.

Downward pressure on inflation in October came from continued restraint in food and petrol prices.

Although improved growth was expected in the third quarter, following the 0.6% growth in the second quarter, this was off a low base following the mining and manufacturing sector strikes.

"The Bank's forecast for GDP growth in 2014 has declined marginally from 1.5% to 1.4%, and forecasts for 2015 and 2016 have been revised down from 2.8% and 3.1% to 2.5% and 2.9% respectively."

International oil prices had declined noticeably since their recent peak in June of around $115 per barrel to current levels of below $80 per barrel.

"The general expectation in the market is that these lower prices could persist for some time," said Kganyago.

"Although some of the advantage of lower international oil prices has been offset to some extent by a weaker rand exchange rate, domestic petrol prices have declined by a cumulative R1.17 per litre since August."

Should current trends continue, a further drop of around 70 cents per litre could be expected in December.