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Johannesburg - The rand rose to a three-week high against the dollar on Friday and was poised for a rally as global central banks maintained accommodative monetary policies.
The local currency, which has weakened to four-year lows in recent months, was at R9.1506/$ at 09:20, slightly firmer than its close in New York on Thursday. It hit a session high of R9.130 - a level not seen since the second week of March.
The Bank of Japan's announcement on Thursday that it would inject about $1.4 trillion into the world's third-biggest economy by the end of 2014 to fight deflation revived appetite for risky assets.
On the same day, the European Central Bank kept interest rates on hold but its president Mario Draghi did not rule out further rate cuts.
The local market is starting to price in the possibility of offshore central banks debasing their currencies further, said George Glynos, emerging markets analyst at ETM Analytics.
"The Bank of Japan's move yesterday was enormous," he said.
"All around, the central banks are very accommodative. A lot of that is getting priced in at the moment. That will potentially help the rand recover even further."
Government bonds strengthened following up to R1.7bn rand ($185m) of offshore inflows into the bond market on Thursday. The yield on the 2026 issue declined 5 basis points to 7.25%, while that on the 2015 paper fell 2 basis points to 5.41%.
($1 = 9.1814 South African rand)
