Carry trade draws foreigners back into South African bonds

* Foreigners buy back into local bonds after record selloff

* Carry trade softens blow of fading “Ramaphoria effect”

* Emerging Market real yields graphic

By Mfuneko Toyana

JOHANNESBURG, July 30 (Reuters) – Bouncing back from a record selloff, South African bonds last week recorded their best weekly inflows since February, as foreign investors ignored a grim economic outlook in favour of yields better than those in most emerging markets.

The rand also launched a surprise rally, trending closer to the crucial sub-13 level against the dollar, with investors cutting bearish bets and pushing the premium on insurance against sharp currency moves near its lowest since June.

Johannesburg Stock Exchange data showed foreigners had bought a net 5.6 billion rand ($425 million) in…

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