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South African rand hits fresh 2-1/2 year high, government bonds firm

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JOHANNESBURG, Jan 22 (Reuters) - South Africa's rand hit a fresh two-and-a-half year high in early trade on Monday, extending a rally driven by optimism about the prospects for change under the new leader of the ruling African National Congress (ANC).

* At 0642 GMT, the rand traded at 12.0800 per dollar, 0.74 percent firmer than its New York close on Friday.

* The currency was trading at its best levels since June 2015, according to Thomson Reuters data.

* ANC leaders met this weekend to outline the party's programme for the coming year amid reports that its executive planned to force President Jacob Zuma - whose presidency has been hit by corruption allegations - to quit as the country's leader. * "ZAR traded stronger during early Asian trade this morning on the back of reports that the ANC's Top 6 are discussing the exit of President Jacob Zuma today," NKC African Economics analysts said in a note.

* Government bonds firmed alongside the currency, with the yield for the benchmark instrument falling 10.5 basis points to 8.39 percent.

* Stocks were set to open lower at 0700 GMT, with the JSE securities exchange's Top-40 futures index down 0.12 percent.

(Reporting by Olivia Kumwenda-Mtambo; editing by Richard Pullin)

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