By Janice Kew Oct. 7 (Bloomberg) -- South Africa's rand traded near a six-year low against the dollar, reversing earlier gains, as traders judged the currency rose too far given the outlook for interest rates. The currency earlier rose the most in more than two weeks after the Federal Reserve said it will buy short-term corporate debt to unlock credit markets, increasing demand for higher- yielding, emerging-market assets. The South African Reserve Bank will hold its repurchase rate at 12 percent on Oct. 9, according to all 18 economists surveyed by Bloomberg. The rand slipped less than 0.1 percent to 8.8593 as of 5:48 p.m. in Johannesburg, from 8.8558 yesterday, its weakest since January 2003. It fell versus 10 of the 16 most-actively traded currencies monitored by Bloomberg. It earlier rose as high as 8.6500 per dollar, the biggest gain since Sept. 19. The rand's five-day relative-strength index against the dollar fell to 15.9 today, below a level of 30 that signals a possible change in price direction. The Federal Reserve Board said today it will create a special fund to backstop the U.S. commercial paper market to support corporations' financing needs. The FTSE/JSE Africa All Share Index advanced 2.6 percent, its biggest gain in a week. ``U.S. policy makers are being pro-active in addressing confidence issues,'' said George Glynos, the managing director in Johannesburg of Econometrix Treasury Management, which advises clients on bond and foreign-exchange transactions. ``As a result we've seen equity markets rally this afternoon.'' Government bonds rose, with the yield on the 13.5 percent security due September 2015 dropping 17 basis points to 8.76 percent. Bond yields move inversely to prices. To contact the reporter on this story: Janice Kew in Johannesburg at jkew1@bloomberg.net.

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