Analysts are divided on the prospects of the South African Reserve Bank raising or holding its key repo rate -- and by extension, the prime lending rate for consumers -- when its Monetary Policy Committee wraps up its bi-monthly meeting on Thursday.

The Monetary Policy Committee (MPC) begins its deliberations on Tuesday and space on a range of fronts has opened for a pause in a tightening cycle that has seen it hike rates by 475 basis points since November 2021, taking its key repo rate to 8.25% and the prime lending rate to 11.75%.

South Africa's consumer price index (CPI) slowed faster than expected in May to 6.3% year on year, a 13-month low, from 6.8% in April.

And the June read - to be unveiled on Wednesday - is expected to show CPI braked below 6.0%, within the 3.0% to 6.0% South African Reserve Bank (Sarb) target range. It was last below 6.0% in April 2022.

The US Federal Reserve also paused its hiking cycle in June, which gives the Sarb room to do the same this week. The Sarb has had to more or less keep pace with the aggressive hikes in the US - which have taken the Fed's key rate from almost zero to 5.0% to 5.25% - to retain the rand's attractiveness to investors.

And the rand itself is currently trading close to 18/dlr after falling in late May to record lows of almost 20/dlr.

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