Gains in the euro - the currency of South Africa's main trade partner - were also supportive with the dollar relinquishing some of hefty gains carved out after the Federal Reserve signalled interest rates were likely to rise further.

At 0645 GMT the rand was trading at 6,2860 against the dollar versus levels of 6,33/US dollar when domestic markets shut on Wednesday, at the stronger end of its recent trading range.

"The markets are taking Mboweni's comments as positive for the rand because of the carry trade and gold has spiked up," a local dealer said.

"I see the rand trading between 6,25 and 6,30 against the dollar for now."

Local newspapers carried front-page headlines of Mboweni's warning to parliament's finance committee on Wednesday that there was a tightening bias to domestic monetary policy, although he did not suggest a hike was imminent.

The central bank holds its next policy meeting on April 12-13.

Consumer price figures on Wednesday showed that inflation accelerated in February but rose more slowly than expected, suggesting there was no need to raise interest rates soon.

Producer price figures for the same month were due yesterday.

Markets did not react to news early in the session that private sector credit and the broad measure of money supply grew at a faster pace during February.

The rand has largely shrugged off a sharp retreat in both emerging market and commodity-linked currencies this week.

Trader said rising gold prices were a factor, as South Africa is the world's biggest producer of the metal.

Gold was trading at US$574,80 yesterday, testing new 25-year peaks.

Domestic government bonds were a touch firmer after retreating on Mboweni's comments.

The yield on the most-traded R153 bond due 2010 was down one basis point at 7,28 per cent.

Yields on the benchmark R157 bond due 2015 were down two basis points at 7,48 per cent.

- Nampa-Reuters

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