The rand gained, rebounding from a seven-week low against the dollar, on speculation accelerating inflation will keep interest rates steady, maintaining the South African currency’s yield advantage. The currency advanced as much as 0.2 percent to 8.3095 per dollar and traded 0.1 percent stronger at 8.3214 as of 8:06 a.m. in Johannesburg. The rand slumped to 8.3487 earlier, the weakest level since Oct. 4. A report tomorrow may show South Africa’s consumer inflation rate rose to 5.9 percent in October, from 5.7 percent the previous month, according to the median estimate of 18 economists in a Bloomberg survey. The central bank kept its benchmark lending rate unchanged for a sixth meeting on Nov. 10 as a weaker rand added to price pressures, and warned the inflation rate will breach 6 percent for a “protracted� period in 2012. “The Reserve Bank may be unwilling to lower interest rates any further,� Cees Bruggemans, the Johannesburg-based chief economist at FirstRand Ltd., the nation’s second-biggest lender, wrote in e-mailed comments. If the rand decline were overdone, “the Reserve Bank might conceivably even raise interest rates,� he said. South Africa’s repo rate of 5.5 percent compares with rates as low as 0.25 percent in the U.S., 0.1 percent in Japan and 1.25 percent in the euro region. Forward-rate agreements starting after the next Monetary Policy Committee meeting in January, yielded 5.51 percent today, indicating investors see little chance of a rate cut. The yield has climbed from as low as 8.35 percent on Nov. 8. South Africa’s 13.5 percent bonds due 2015 yielded 6.83 percent, little changed from yesterday’s close. To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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