Reserve Bank governor Gill Marcus. Photo: Simphiwe Mbokazi.

Johannesburg - South African Reserve Bank Governor Gill Marcus said forecasts by some analysts that policy makers will raise the key lending rate another 200 basis points in the coming year are overdone.

Past tightening cycles aren’t a good guide for the future, Marcus said late yesterday in Pretoria, the capital.

The market reaction when policy makers raised the repurchase rate by 50 basis points to 5.5 percent in January was extreme, she said.

“I thought that the market expectation of a further 200 basis points increase over the coming year sounded overdone, and I still believe this to be the case,” Marcus said.

The unexpected rate increase, the first in more than five years, came amid mounting concern that the rand’s 22 percent decline against the dollar since 2013 will push inflation above the bank’s 3 percent to 6 percent target band.

Inflation accelerated for the second consecutive month to 5.8 percent in January.

Africa’s biggest economy expanded 1.9 percent in 2013, the slowest pace since a 2009 recession.

The rand fell 0.2 percent to 10.8292 per dollar at 7:38 a.m. in Johannesburg.

Yields on bonds due December 2026 rose one basis point to 8.56 percent.

Marcus said this week that monetary policy remains accommodative even after the January increase.

She said yesterday that there won’t necessarily be “adjustments at every meeting or that if rates are increased, that they will be increased by the same amount.” - Bloomberg News