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Johannesburg - The rand opened firmer on Tuesday against the dollar, buoyed by the inclusion of SA bonds in a prestigious index that helped it shake off worries about Greece's future in the eurozone.
The rand closely tracks the euro and worries about mounting debt among the block's members have hit the currency of Africa's largest economy, which relies heavily on Europe for trade.
The rand firmed half a percent to R8.424 against the dollar at 05:43 GMT from Monday's New York close of R8.4750.
"What is helping the rand is the Citibank world bond index announcement," said Ion de Vleeschauwer, a trader at Bidvest Bank said on the news that hit markets on Monday.
South Africa will join Citi's influential World Government Bond Index from October, conferring an important seal of approval on the continent's biggest economy after recent credit outlook downgrades.
Inclusion in the index should help Pretoria's borrowing plans for its multi-billion dollar infrastructure drive it says will fuel economic growth after a 2009 recession, helping narrow the budget deficit to about 3% of gross domestic product by 2014 from 4.6% this year.
"But persistent euro weakness, will result in rand weakness. There is no doubt about it," added De Vleeschauwer.
The yield on the benchmark three-year note slid 2.5 basis points to 6.24% and that on the 14-year bond was unmoved at 8.31%.
