UPDATE 1-South African rand drops as power cuts continue

(Updates prices)

JOHANNESBURG, Nov 9 (Reuters) - South Africa’s rand dropped back on Tuesday, losing ground won earlier in the week, as damaging local power cuts were scheduled to continue until the weekend and investors awaited key U.S. inflation data to gauge the Federal Reserve’s next move.

At 1517 GMT, the rand traded at 15.0650 against the dollar, just over 1% lower than its previous close of 14.9150.

Andre de Ruyter, CEO of struggling state utility Eskom, said lengthy power cuts were set to be reduced gradually throughout the week, ending only on Saturday.

Investors are waiting for U.S. inflation data due on Wednesday, when a strong reading could reignite talk of the Fed raising interest rates sooner than expected.

Local investors will also be watching finance minister Enoch Godongwana’s maiden Medium-Term Budget Policy Statement (MTBPS) expected on Thursday, outlining estimated budget deficits and economic growth forecast over the next three years.

Government bonds strengthened, with the yield on the benchmark instrument due in 2030 dropping 15 basis points to 9.27%.

Meanwhile, the Johannesburg Stock Exchange dipped, with its Top-40 Index slipping 0.12% to 61,247 points and the broader All-Share Index losing 0.1% to 67,983 points.

Shares in telecoms firm Telkom closed over 12% lower after the company reported weaker than expected results at its mobile business. (Reporting by Olivia Kumwenda-Mtambo and Emma Rumney; Editing by Sherry Jacob-Phillips and Mark Potter)