(Updates with closing prices)
JOHANNESBURG, Jan 18 (Reuters) - South Africa's rand scaled a 2-1/2 year high against a broadly fragile dollar on Thursday, climbing more than 1 percent after the central bank held interest rates steady and the new head of the ruling ANC ramped up his tough talk on graft.
At 1520 GMT, the rand was 1.1 percent firmer against the dollar after earlier hitting 12.1525, according Thomson Reuters' data, its strongest level since mid-2015.
South Africa's central bank kept its benchmark repo rate unchanged at 6.75 percent on Thursday, in line with expectations, saying that risks to inflation were still on the upside despite the recent strengthening of the rand. On the political front, Deputy President Cyril Ramaphosa on Thursday called on prosecutors to act urgently in pursuit of a firm owned by friends of President Jacob Zuma, as pressure mounted on the latter to step down. Ramaphosa succeeded Zuma as head of the African National Congress last month, making him likely to become the next president in 2019 - or earlier, if Zuma resigns.
This would be welcomed by markets and investors as Zuma's rule has been marred by shoddy governance and widespread allegations of corruption, which he has denied.
Government bonds were little changed with the yield on benchmark 2026 instrument half a basis point higher to 8.48 percent. Stocks were also little changed with benchmark Top-40 index closing 0.11 percent higher at 54,101.49. Its 14-day RSI, a momentum indicator tracked by analysts, shows it is near overbought levels, which could cap gains in coming days.
Retailers extended a rally from Wednesday triggered bystrong domestic retail data which has been taken as a sign of a better-than-expected economic recovery.
Woolworths was the biggest advancer of the session, leaping more than 9 percent to 66.63 rand.
(Reporting by Ed Stoddard; Editing by Hugh Lawson)Keywords: SAFRICA MARKETS/
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