This is according to central bank governor, Lesetja Kganyago, at the Davos World Economic Forum.
The South African Reserve Bank will hold its first policy meeting for 2015 next week and most economic analysts and traders expect it to hold its benchmark repo rate stable at 5.75 per cent, after raising it by 75 basis points in 2014.
Kganyago noted that while the oil price declined, many emerging market currencies including South Africa’s rand had depreciated.
“The position we are taking is that in the same way that when the oil price goes up, you want to see through the cycle, you want to see second round effects kicking in before you can take any policy response,” Kganyago told Reuters TV in Davos late on Wednesday.
(READ MORE: S.Africa c.bank’s Kganyago says little policy space to boost demand)
“The same must be applied when the oil price goes down. In the end, you have got to see what are the net effects of that adjustment that has taken place,” he said.
The central bank last year hinted that rates in South Africa would have to rise further, with policy tightening in the United States.
Kganyago said policy stance would depend on what happened to real rates, which factor in inflation.