Higher oil and food prices have been the main forces behind inflation ticking up to 4.2% year-on-year in April from a five year low of 3.2% in September.

Inflation has been inside a 3% to 6% target range since February 2010 and the bank reiterated it should remain in that band until the end of 2012, except for an expected temporary breach in the first quarter of next year.

The central bank has kept interest rates in Africa's biggest economy at 30-year lows this year, keeping the repo rate at 5.5% after 650 basis points of cuts from December 2008 to December 2010.

Its next move is expected to be up but the bank gave no hints as to the timing of any tightening.

A strong rand -- the currency has gained 13% against the dollar in the last year -- has helped contain inflation.

The bank said it continued accumulating foreign exchange, purchasing $10.3-billion in the financial year ended March 31.

"The need to sterilise the impact of these purchases of foreign exchange on domestic liquidity resulted in the Bank reporting an after-tax loss for the second consecutive financial year, amounting to R1.2-billion."

The bank recorded a loss of R1.05-billion in the previous year.

The bank said sovereign debt developments in peripheral Europe still posed a risk to the global recovery and continued affect domestic economic conditions.

The economy grew by a stronger-than-expected 4.8% in the first quarter of this year but growth in manufacturing output slowed sharply in April, raising worries that the momentum might not be maintained in the second quarter.