The rate increase was smaller than the 50 basis point increase expected by the majority of economists polled by Reuters.
Three members of the bank's Monetary Policy Committee preferred the 25 basis points increase, while two members preferred a 50 basis points increase, Lesetja Kganyago, Governor of the South African Reserve Bank, said.
"The revised repurchase rate remains supportive of credit demand in the near term, while raising rates to levels more consistent with the current view of inflation and risks to it," he said.
December consumer inflation in South Africa dipped to 7.2% year on year from 7.4% in November, data showed last week, in a sign the price pressures have been gradually easing in Africa's most industrialised economy.
The central bank targets inflation between 3% and 6%.
(Reporting by Bhargav Acharya, Alexander Winning and Kopano Gumbi; Editing by James Macharia Chege)
