The SA Reserve Bank (SARB) should start "normalising" interest rates from the fourth quarter of this year, according to Absa Capital economist Gina Schoeman.

"The MPC [Monetary Policy Committee] is forecast to keep interest rates on hold at current low levels until around November this year," forecast the Nedbank Group Economic Unit.

SA's consumer price index (CPI), which is used by the SARB for its inflation target, registered at 6.3% year on year (y/y) in January from 6.1% y/y in December, Statistics SA (Stats SA) figures showed on Wednesday.

The 6.3% was slightly above market expectations. A survey of leading economists by I-Net Bridge expected inflation to tick up to 6.2% in January.

Tebogo Mosepele, a Standard Bank economist, said that despite the rise in inflation, the SARB was likely to keep interest rates on hold in 2012. She highlighted the current economic environment as the reason that would give the SARB "less room to move" on the policy rate.

CPI increased 0.6% month on month (m/m) in January from 0.2% in December, Stats SA reported.

This monthly increase was mainly driven by increases in the prices of food, and miscellaneous goods and services.

The food and non-alcoholic beverages index increased by 1.5% between December 2011 and January 2012, while the miscellaneous goods and services index rose 1.2% over the same period.

The main drivers behind the rise in miscellaneous goods and services were a 1.4% increase in insurance and a 2.8% increase in financial services between the two months.

The housing and utilities index increased by 0.1% between December 2011 and January 2012, Stats SA reported.

Adenaan Hardien, an economist with Cadiz Asset Management, expected consumer inflation to track broadly sideways through most of 2012, peaking at 6.5% over the third quarter.

"We expect consumer inflation to slip back into the target range over the second quarter of 2013, but remain close to the upper end of the target range," said Hardien.

Hardien expected the SARB to keep the repo rate unchanged at 5.5% until the first half of 2013, and only start a "gradual rate hiking cycle" from there.

The Nedbank Economic Unit forecast inflation to hover above 6% for much of 2012, touching a peak of about 6.4% around the middle of the year before drifting lower towards the end of the year.

Risks to inflation included a sharp escalation in global crude oil prices, a sharper-than-expected drop in the value of the rand, and political unease around the outcome of the African National Congress (ANC) conference in Mangaung later this year, the Nedbank Economic Unit said.