His comments were based on fears of rising international oil prices a concern highlighted at the Bank's monetary policy committee meeting last month.

While short-term factors may boost inflation above the 6% target, CPIX would generally remain within the target, said Mboweni.

He said that "in general most factors favour a containment of inflation within the target range".

Economists, however, have been divided about whether the Bank would hike interest rates this year, with some predicting a rate increase by October and others expecting rates to remain flat this year and for most of next year.

Mboweni did not signal whether rates would rise, but said monetary policy decisions would be "guided by the mandate to maintain CPIX inflation within the target range".

CPIX has remained stable at 4,4% year-on-year from March to May, but is expected to rise gradually towards 6% by year-end, according to most forecasts.

Mboweni said domestic growth prospects were "positive", based on strong fixed capital spending and buoyant expenditure by households and government.

Figures from the Bank's June quarterly bulletin showed gross expenditure on fixed capital formation surged 21% in the first quarter the highest growth since 1998 after the strong rand lowered the prices of imported capital goods.

Consumer spending also increased at its strongest levels in almost 10 years, fuelled by last year's interest rate and tax cuts.

While the rand was seen as a risk to the inflation outlook, Mboweni said the build-up of foreign exchange reserves would "contribute to rand strength and stability".

The Bank had been building its reserves by "creaming off" excess forex in the market.

Gross reserve levels have been rising steadily after the Bank squared off the balance on its forward book (its debt in the forward forex market).

Figures released by the Bank last week showed that gross forex reserves stood at $11,35bn at the end of last month, up from $10,47bn in May.