JOHANNESBURG: South Africa's rand firmed slightly on Thursday, as the dollar slipped but still traded near a 16-month high after investors bet that the U.S. Federal Reserve will tighten monetary policy faster than its peers.

At 1500 GMT, the rand traded 0.2% firmer at 15.8600 against the dollar.

Fed minutes showed on Wednesday that various policymakers at the U.S. central bank would be open to speeding up the taper of their bond-buying programme and raising interest rates more quickly if high inflation held.

Dollar moves have been one of the main drivers for the rand in recent days, along with emerging market contagion linked to a meltdown in the Turkish lira.

On the domestic front, data showed producer inflation quickened in October, providing more clues about price pressures in Africa's most industrialised economy.

Last week, the South African Reserve Bank raised rates for the first time in three years in response to broadening inflationary risks, but that has done little to buttress the rand, which is down roughly 4% against the dollar this month.

The yield on the government's benchmark 2030 bond was down 3 basis points to 9.725%.

South Africa's rand falls as dollar gains on bets for quicker rate hikes

Shares on the Johannesburg Stock Exchange (JSE) slipped, though the fall was limited, despite strong global markets, as a new coronavirus variant discovered in South Africa spooked investors.

The daily tally of COVID-19 cases has started rising in the country, signalling the early phase of a fourth wave.

On Thursday, scientists said they had detected a new COVID-19 variant - called B.1.1.529 - in the country, which had a "very unusual constellation" of mutations. They called it concerning.

The stock market, which had been hovering around its all-time highs for past two weeks, shed early gains, with the blue-chip index of top 40 companies losing 0.17% to end at 64,063 points.

The benchmark all-share index closed down 0.01% to 70,555 points.