Johannesburg - South Africa’s rand rallied in step with currencies from developing nations, erasing its 2014 decline against the dollar as the outlook for global economic growth bolstered emerging-market assets.

The currency of the continent’s biggest gold producer climbed after foreign investors bought South African bonds for a third day yesterday, the longest stretch in two weeks.

All 16 major peers tracked by Bloomberg, including the rand, strengthened against the dollar.

Growth in sub-Saharan Africa is set to accelerate to 5.2 percent this year from 4.7 percent in 2013, the World Bank said yesterday.

“Some concerns about growth are starting to lift globally and that is going to help emerging markets and their currencies,” Vivienne Taberer, who helps manage the equivalent of more than $14 billion in fixed-income assets at Investec Asset Management, said by phone from Cape Town today.

“Foreign flows have started to turn a bit more supportive last week. The rand looks cheap.”

The rand gained 0.9 percent to 10.4386 per dollar by 7:16 p.m. in Johannesburg, its strongest level since December 30 on a closing basis.

Yields on government bonds due December 2026 fell six basis points, or 0.06 percentage point, to 8.31 percent, heading for the lowest close since January 14.

Emerging-market stocks rose to their highest level in almost four months, fuelled by speculation that China would adopt stimulus measures to boost its economic growth.

None of the major developing-nation currencies monitored by Bloomberg weakened against the dollar, apart from the Philippine peso.

The South African Reserve Bank unexpectedly increased the country’s benchmark interest rate on January 29 after similar moves by Turkey, India and Indonesia, leading to an 8.4 percent rally in the rand.

The dollar weakened after jobs data in the US missed estimates on April 4, boosting speculation the Federal Reserve’s policy would remain accommodative.

Foreign investors bought a net 438 million rand ($42 million million) of South African bonds yesterday and 2.2 billion rand in equities, according to data from the Johannesburg Stock Exchange.

The 165-member all-share gauge advanced 0.2 percent today. - Bloomberg News