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Inflation rises to 6.3% in South Africa

Inflation in South Africa rose to 6.3 percent in January, up from 6.1 percent the month before, driven by food prices and costs of insurance and financial services, the government said Wednesday.

The monthly rate was 0.6 percent in January, Statistics South Africa said.

January was the third consecutive month that the annual inflation figure stayed above the Reserve Bank’s target ceiling of six percent, but the statistics agency predicts that it will dip back down in the first quarter of 2012.

The rate is expected to ease slightly in the coming months.

The average rate for 2011 was 5.0 percent, against 4.3 percent in 2010 and 7.1 percent in 2009.

The Reserve Bank has held its benchmark interest rate steady at 5.5 percent since November 2010 — the lowest level in three decades — and is struggling to balance calls for another reduction to boost the economy and a gradual increase.