South Africa's central bank lowered its key repurchase rate by 25 basis points to 6.50 percent, as expected by some analysts, citing an improved outlook on inflation and economic growth but underscored that "future policy decisions will be highly data-dependent and sensitive to the assessment of the balance of risks to the outlook."

South Africa’s new leadership announced on Wednesday it was taking the politically risky step of raising value-added tax for the first time in 25 years, part of efforts to cut the deficit and stabilise debt under new President Cyril Ramaphosa.

Political uncertainty will persist in South Africa following the election of Cyril Ramaphosa as leader of the African National Congress, Fitch Ratings says. The closeness of the result, and the likely challenges in agreeing and implementing changes to existing economic and fiscal settings, suggest that the policy paralysis prior to this week's national conference may not be quickly resolved.

South Africa's central bank left its benchmark repurchase rate at 6.75 percent, as expected, describing this decision as "prudent" during a time of a"high degree of uncertainty" and downside risks to economic growth and inflation.