South Africa's Reserve Bank left interest rates unchanged at 5.75 percent as expected on Thursday but warned the deteriorating inflation outlook meant the stance cannot be maintained indefinitely. "The Monetary Police Committee will continue to closely monitor the evolution of inflation expectations and other factors that could undermine the longer term inflation outlook and stands ready to act when appropriate," Governor Lesetja Kganyago told a news conference. Below are comments from South African Reserve Bank Governor Lesetja Kganyago at his latest decision on interest rates.Inflation The inflation forecast of the bank has changed since the previous MPC. Inflation is now expected to average 4.9 percent in 2015, with a first quarter low of 4.1 percent.A temporary breach of the upper end of the inflation target band is still expected during the first quarter of 2016 to peak at 6.8 percent and to decline to 6 percent by the second quarter of that year. The average inflation rate of 6.1 percent is forecast for the year.Should NERSA fully accede to the Eskom's request, a higher peak of headline inflation as well as a more extended breach of target can be expected. The direct and indirect impact of such an increase could increase average inflation by around 0.5 percentage points over a year.The forecast period has now been extended to the end of 2017 with an average inflation rate of 5.7 percent expected for the year and 5.6 percent in the final quarter.Growth The domestic growth outlook remains weak, amid continued electricity supply constraints and low and declining levels of business and consumer confidence. The banks forecast for GDP growth is marginally down from the previous forecast: growth is expected to average 2.1 percent and 2.2 percent in 2015 and 2016, and to increase to 2.7 percent in 2017.Rand The rand, therefore, remains an upside risk to the inflation outlook, although the degree of upside risk is tempered somewhat by the continued relatively low level of pass-through to consumer price inflation.The bank estimates that the actual pass-through could be about half of what is currently implied in the forecast model, but it is still uncertain as to whether this reflects a permanent change or a temporary phenomenon which can reverse rapidly...