At 5pm, the rand bid at R11.76 to the dollar, 13.13cents firmer than at the same time on Monday, having touched a session high of R11.71 earlier yesterday.
In fixed income, the yield for the benchmark government bond fell by 9.5 basis points to 8.11percent, reflecting firmer bond prices.
“South African fourth-quarter GDP (gross domestic product) figures were better than even our own above-consensus forecast,” Capital Economics Africa economist, John Ashbourne, said in a note. “We expect that the economy will retain momentum in the coming quarters and beat consensus expectations in 2018.”
Helped by growth in farming and trade, the economy expanded by 3.1percent in the last three months of 2017, beating market expectations of a 1.8percent expansion after 2.3percent growth in the third quarter.
Economists said the positive growth boosted the country’s chances of avoiding a potentially debilitating credit rating downgrade by Moody’s this month.
Moody’s - the only major agency that still ranks the country’s debt as investment grade - is due to publish its rating decision this month after placing the country on review for a downgrade.
S&P Global Ratings and Fitch already rate South African debt as “junk”.
A downgrade to sub-investment grade by Moody’s could see the country’s debt lose its place in Citi’s World Government Bond index, the biggest of the global benchmarks and tracked by $2trillion (R23.8trillion) to $3trillion of funds.
On the stock market, the JSE Top40 index rose 2.42percent to 52257.99 points, while the broader all share index finished 2.3percent up at 59242.86 points.
Tiger Brands shares gained 2.45percent to end the session at R403, having hit a three-month low on Monday after it recalled products produced by its Enterprise unit after the source of a listeria outbreak that has killed about 180 people was traced to its manufacturing facility.