South Africa's central bank left its key lending rate at 7% in a tight decision, holding off from easing monetary policy further while it assesses the impact of previous rate cuts.

Thursday's policy announcement was the first since the South African Reserve Bank (SARB) said it would aim for the bottom of its 3% to 6% inflation target range rather than the middle, an effort to lock in low inflation.

The Monetary Policy Committee was split, with four members preferring no change in the repo rate and two favouring a 25 basis point cut.

SARB Governor Lesetja Kganyago said the effects of 125 basis points of rate cuts since September 2024 were still filtering through in Africa's biggest economy.

"We want to see how this is affecting the economy, how expectations evolve, and how inflation risks are resolved," Kganyago told a press conference.

Economists polled by Reuters had expected a close call on Thursday after annual inflation unexpectedly slowed in August, falling to 3.3% from July's 3.5% reading.

Well-contained inflation has allowed the SARB to cut its repo rate three times this year, including at its last meeting in July.

Since then, U.S. President Donald Trump imposed a steep 30% tariff on South African goods, but the full effects are yet to be felt.

The central bank has said U.S. tariffs could cause tens of thousands of job losses in South Africa, though it thinks the overall impact on local inflation and economic growth could be modest.

On Thursday the bank said it now expects inflation to average 3.4% this year, marginally higher than a July forecast of 3.3%.

It raised its economic growth forecast for this year to 1.2% from 0.9%, reflecting a better-than-expected performance in the second quarter.