Reserve Bank governor Gill Marcus. Photo: Simphiwe Mbokazi.

Johannesburg - South African Reserve Bank Governor Gill Marcus said monetary policy remains accommodative even after borrowing costs were increased for the first time in more than five years.

The bank will “continue to focus on its core mandate of price stability, but with due regard to the impact of its actions on economic activity,” Marcus said in a speech at the Central University of Technology, according to a copy posted on bank’s website today.

Policy makers increased the repurchase rate by half a percentage point to 5.5 percent on January 29, concerned that the rand’s 8.5 percent slump against the dollar in the past six months will push inflation above the bank’s 3 percent to 6 percent target.

Since then, the currency of Africa’s biggest economy has gained 3.9 percent versus the dollar, easing pressure on the bank to raise borrowing costs on March 27, after its next meeting.

“The present environment presents a dilemma of slowing growth on the one hand, but rising inflation on the other,” Marcus said.

“Given the fragile growth environment, the Reserve Bank has been more tolerant of inflation at the upper end of the target range for some time.”

While economic growth will probably recover to 2.8 percent this year from 1.9 percent in 2013, that’s still too low to make a dent into the nation’s 24 percent jobless rate, Marcus said. - Bloomberg News