Johannesburg - South Africa’s rand gained to its best level against the dollar in more than two weeks as emerging-market currencies rallied after Turkey’s central bank raised interest rates to stem capital outflows.

Turkey’s decision was announced at midnight in Istanbul and followed an unexpected increase in India’s interest rates yesterday.

BlackRock Inc. said the moves will help restore investor confidence after a rout in developing-nation currencies and a $1.87 trillion selloff in global stocks in the week through January 27.

South Africa’s central bank will leave its policy rate unchanged today, according to all 25 analysts in a Bloomberg survey.

The Turkish central bank’s “bold approach has seen the rand improve significantly,” Mohammed Nalla, head of strategic research at Nedbank Group Ltd. in Johannesburg, said in a note to clients.

“Talk is drifting to the possibility of a unexpected hike from the South African Reserve Bank governor this afternoon.”

The rand rallied as much as 1.2 percent to 10.9039, its strongest level since January 10, and traded 0.9 percent higher at 10.9448 per dollar by 9:01 a.m. in Johannesburg.

The yield on benchmark government bonds due December 2026 dropped four basis points, or 0.04 percentage point, to 8.71 percent, retreating from the highest level since January 2012.

Foreign investors bought a net 398 million rand ($36 million) of South African bonds yesterday, stemming three days of outflows, according to JSE Ltd. data.

The Federal Reserve concludes its last meeting today under Chairman Ben S. Bernanke, with economists projecting a second $10 billion cut to its monthly bond purchases that helped fuel demand for South African debt. - Bloomberg News