Growth in demand for credit by the private sector eased to 11.85 percent year-on-year in January from a revised 13.6 percent in December, the SA Reserve Bank said on Friday.

"We should see this number falling for the rest of the year," Nedbank economist Carmen Altenkirch said.

There was a sharp slowdown in instalment sales and leasing finance, reflecting a weaker demand for durable goods, Altenkirch added.

"There was also a continued slowdown in mortgage growth, obviously reflecting weaker conditions in the housing market," she said.

Standard Bank economist Shireen Darmalingam said the data showed that credit extended to the private sector was following a more rapid descent than expected despite the accommodative monetary policy environment.

"Indeed, consumers faced with strict lending criteria in a cash-strapped economy are starting to consolidate their debt positions," she said.

While further economic weakness lay ahead, positive developments on the inflation front brightened the outlook for monetary policy.

"Standard Bank anticipates a further 250 basis points worth of rate relief this year," she said.

The SARB also announced on Friday that growth in money supply (M3) declined to 12.91 percent compared to a revised 13.64 percent previously.