Market attention will be focused even more than usual on the interest rate decision of the SA Reserve Bank's monetary policy committee (MPC), Standard Chartered Bank said on Thursday.

Newly appointed governor Gill Marcus is due to announce the MPC's rate decision later on Thursday.

The added attention followed a meeting between the ruling ANC and its leftist alliance partners over the weekend, at which a decision was taken to explore broadening the SARB's inflation-target mandate.

"While Marcus herself (a former bank chairperson and deputy governor) cuts an almost unique figure with strong ties to both South African business and the left, we expect that the repo rate will be left on hold," Standard Chartered Bank's Razia Khan said in a statement.

Power crisis forced SARB to pause

Firstly, with the debate on the inflation targeting framework set to get underway only next year, the SARB would continue to operate under its current mandate for now. Secondly, the mandate had in any case always been interpreted flexibly.

"Monetary policy decisions taken now only impact inflation two years down the line. Moreover, in early 2008, the power crisis forced the SARB to pause, temporarily, its tightening cycle."

Easing had begun in December 2008, when inflation was twice the upper level of the official target.

"Growth has always been a consideration in the SARB's rate decisions, even if not stated explicitly."

Clear signs of a turning point

With South Africa's economy showing clear signs of having reached a turning point Khan expected the repo to remain at seven percent.

"While the strong rand is a potential spoiler, there is no consensus at the SARB that cutting interest rates will necessarily weaken the currency."

Khan said for markets, the real uncertainty lay further out ? whether inflation (to paraphrase former SARB governor Tito Mboweni) was still considered by all to be the "original sin", or not.