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S.Africa central bank holds rates despite slow growth

South Africa's Reserve Bank decided on Thursday to keep interest rates on hold, despite revising down growth forecasts for the year.

After a three-day policy meeting the bank decided to leave its key rate at 5.0 percent, while growth for 2013 was forecast to come in at a sluggish 2.6 percent.

Announcing the decision Bank governor Gill Marcus painted a bleak picture for the economy, the biggest in Africa.

Detailing a "challenging domestic outlook" Marcus noted job creation continued at a "subdued pace" while the outlook for the crucial but downsizing mining sector was "bleak."

She also predicted inflation would breach the upper range of the bank's own target in the third quarter and the weakening rand could make that scenario worse.

That is likely to have tipped the banks hand in deciding whether to cut interest rates, which would stimulate the economy, but which could fuel inflation.