Cape Town - The rand led currencies in emerging markets against the dollar after producer inflation in Africa’s biggest economy accelerated faster than economists’ estimated, fuelling speculation of a further increase in interest rates.

Factory-gate prices rose 7 percent in January, from 6.5 percent in the previous month, the statistics agency said today.

The median estimate of 14 economists in a Bloomberg survey was 6.8 percent.

Central bank Governor Gill Marcus unexpectedly raised borrowing costs for the first time in five years on January 29 and said future tightening would be dependent on data.

“Today’s numbers underline the fact that there is upward price pressure in the economy,” Busisiwe Radebe, an economist at Nedbank Group Ltd. in Johannesburg, said in a note.

“The Reserve Bank will likely raise rates by 50 basis points at the next Monetary Policy Committee meeting” on March 27, she said.

The rand advanced 0.4 percent to 10.7731 per dollar by 3 p.m. in Johannesburg, the best performance out of 24 emerging- market currencies monitored by Bloomberg.

The yield on bonds due December 2026 rose two basis points, or 0.02 percentage point, to 8.56 percent.

The rand extended gains after Moody’s Investors Service said Finance Minister Pravin Gordhan’s budget, presented to lawmakers yesterday, was positive for the nation’s creditworthiness.

Moody’s placed South Africa on a negative outlook after cutting its rating in 2012 to Baa1.

Fitch Ratings Ltd. lowered the nation to BBB last year, with a stable outlook.

“Spending restraint is being maintained despite less robust growth and revenue forecasts,” Kristin Lindow, a senior vice president at Moody’s in New York, said in an e-mailed response to Bloomberg’s questions today.

The budget “showed the government’s fiscal consolidation plans are on track,” Fitch said in an earlier statement.

Foreign investors bought 1.92 billion rand ($178 million) of South African bonds yesterday, a third day of inflows, and sold 1.59 billion rand of equities, according to JSE Ltd. data. - Bloomberg News