Johannesburg - Demand for credit from South Africa's private sector fell for the fourth month in a row in January, highlighting the still-vulnerable state of household finances that could slow the pace of economic recovery.
The central bank said on Friday demand for credit from the private sector fell 1.12% year-on-year in January after a revised contraction of 0.55 in December.
The market was expecting an annual 1.2% decline, according to a Reuters poll.
Growth in the broadly defined M3 measure of money supply slowed to 0.57% year-on-year in January compared with revised growth of 1.6% in December and a forecast of 1.9% growth.
A recovery from the country's first recession since 1992 gathered speed in the fourth quarter as the economy grew by 3.2% from the third quarter, but demand-related sectors were still weak.
The central bank cut rates by 500 basis points between December 2008 and August 2009 to help stimulate the economy, but households and companies are still stressed after the recession slashed nearly 900,000 jobs.
Analysts said the Reserve Bank would likely hold the repo rate steady at 7.0% at its meeting in March because other other indicators such as GDP data were strong.
"Even though the figures are bad I think (monetary) policy is probably going to be on hold for a while," said Colen Garrow, economist at Brait.
"They are probably going to take this into account next month but I don't think the numbers are going to prompt a rate cut, we are going to be on hold from now."
Finance Minister Pravin Gordhan wrote to Reserve Bank Governor Gill Marcus this month to say the MPC could focus more on growth than before as the economy recovers from recession.
Leftist allies of the ruling ANC want the central bank to cut interest rates aggressively but the central bank has said its main role and focus remains the pursuit of low inflation.
Another economist said the credit figures would likely turn positive in the next few months as the recovery gains traction.
"We are going to start moving up in the general terms of this index, but I think it is going to take a while for this year-on-year figure to be positive... maybe only in April," said Merina Willemse, economist at Efficient Group.