JOHANNESBURG, Feb 26 (Reuters) – South African inflation edged up in January in the first release since the statistics agency updated its consumer price basket, but the headline rate remains near the bottom of the central bank’s target range.

Inflation rose to 3.2% year on year in January from 3.0% in December, lower than the 3.3% forecast by economists and still well within the South African Reserve Bank’s range of 3% to 6%.

Annual core inflation, which strips out volatile items, such as food and energy, came in at 3.5% in January, in line with analysts’ expectations.

South Africa’s central bank has cut interest rates at its last three monetary policy meetings, but its last move in January followed a split decision as it stressed the uncertain global backdrop.

Some analysts think the central bank will soon pause its rate-cutting cycle, though Capital Economics economist Jason Tuvey said in a research note on Wednesday that he thought there was still room for more policy easing.

“January’s CPI data will lend support to the idea that price pressures in South Africa have been brought back under control,” Tuvey wrote.

Nicky Weimar, an economist at Nedbank, said she suspected the central bank would keep its repo rate unchanged on March 20 “until the inflationary impact of the change in US economic policies becomes clearer”.

A breakdown by Statistics South Africa showed housing and utilities, food and non-alcoholic drinks, and restaurants and accommodation were among the main contributors to January’s annual inflation rate.

The statistics agency made changes to goods and services in its consumer inflation basket and updated the weights to reflect changes in spending habits. Items now in the basket include rose wine, air fryers and streaming services.

(Additional reporting by Bhargav Acharya and Tannur Anders; Editing by Alexander Winning and Tomasz Janowski)