Johannesburg - The rand gained, headed for the biggest monthly advance since December 2012, as South African Finance Minister Pravin Gordhan pledged to rein in spending to narrow the budget deficit over the next three years.

Gordhan cut his deficit targets in the current fiscal year and for each of the next three years, steps both Moody’s Investors Service and Fitch Ratings said were positive for the nation’s credit outlook.

Twenty of 24 emerging-market currencies tracked by Bloomberg are rebounding against the dollar this month after they all slid in January as interest rates increases from India to South Africa helped stem outflows.

“The budget has been taken in a pretty decent light and if all the predictions come through then there should be some respite for the rand,” Ion de Vleeschauwer, chief currency dealer at Bidvest Bank Ltd., said by phone from Johannesburg.

The rand strengthened 0.2 percent to 10.6838 per dollar by 12:38 p.m. in Johannesburg, bringing its monthly gain to 3.9 percent.

Yields on government bonds due December 2026 dropped four basis points, or 0.04 percentage point, to 8.54 percent. - Bloomberg News