 South Africa's business confidence dipped marginally in March, hovering just above a four-year low hit in January, the South African Chamber of Commerce and Industry said on Friday. SACCI said its business confidence index (BCI) stood at 93.9 in March, from 94.0 in February. It fell to 93.8 in January, its lowest level since October 2003. The business organisation said a weaker exchange rate and high inflation weighed on industry confidence, while strong share prices and lower real financing costs helped cap the index's fall. "Given the present uneasy global economic climate, uncertainty in the global financial system and lower local and global economic growth prospects, the BCI remains stationary," it said in a statement. But conditions were tough and confidence fragile. The chamber said strong inflation remained a problem, although easier money supply and credit growth figures suggested the central bank's monetary policy tightening may be having the desired effect of taming consumer spending. The Reserve Bank has a tough interest rate decision to make next week after leaving its repo rate unchanged at 11 percent in January following a total of 400 basis points in increases since June 2006. It had halted the rate hike cycle on concerns about economic growth but inflation continues to accelerate, with the targeted CPIX jumping to a five-year high 9.4 percent year-on-year in February. "Monetary policy already faces difficult challenges of balancing risks of accelerating inflation and price instability and constrained economic activity," SACCI said. While lower international oil and food prices in the shorter term could bring some relief, a weaker rand together with South Africa's propensity to import may add to inflationary expectations. "Business confidence is at a stage where it could change for the better or worse and economic policy issues therefore shoudl be approached with caution," it added.