By Tannur Anders and Bhargav Acharya

JOHANNESBURG, Sept 19 (Reuters) - The South African rand

held onto early gains on Thursday following the South African

Reserve Bank's (SARB) decision to cut interest rates for the

first time in over four years, after a super-sized interest rate

cut by the U.S. Federal Reserve.

At 1600 GMT, the rand traded at 17.4775 against the dollar

, about 0.4% stronger than its previous close.

The U.S. currency was down 0.3% against a basket of

peers.

The SARB joined the easing club with a 25 basis point (bps)

rate cut, as predicted by economists polled by

Reuters, but struck a measured tone, saying although inflation

had fallen faster than expected there were still risks to the

outlook.

Data showed on Wednesday that South Africa's annual

inflation rate fell to 4.4% last month, lowest since April 2021

and just below the mid-point of the central bank's 3% to 6%

target range.

"The rand traded stronger for the seventh consecutive day,

trading as low as 17.39 at one point, but ran out of steam in

the latter part of the day," said Wichard Cilliers, head of

market risk at TreasuryONE, following the rate decision.

The rand's 17.39 per dollar level on Thursday was its

strongest since February 2023.

The Fed cut interest rates by 50 bps on Wednesday, weakening

the dollar and boosting the risk-sensitive rand.

On the Johannesburg Stock Exchange, the Top-40 index

closed about 1.3% higher.

South Africa's benchmark 2030 government bond was

up marginally, with the yield down 1 basis point at 8.84%.

(Editing by Alexander Winning, Barbara Lewis and Jane Merriman)