Moody’s Investors Service’s failure to pronounce on the country’s credit rating propelled the rand to its biggest gain against the dollar since early January, shaking off volatility in the wake of Turkey’s local elections.

The rand, which usually suffers disproportionately in times of generalised emerging-market turmoil, on Monday posted the biggest gain against the US currency among emerging market currencies tracked by Bloomberg.

SA’s bonds also gained with yields, which move in opposite direction to the price, on securities that mature in 2026 dropping to the lowest level in ten months.

The JSE all share index — fresh from its best first-quarter performance in 12 years — gained 1.15%

The Moody’s decision to delay SA’s credit-rating review, due on Friday, almost guarantees that the country will retain its investment-grade rating going into May’s election.

Most economists expected the ratings company to change the outlook from stable to negative and then downgrade the country by the end of 2019.

While it may still act before then, Moody’s said the next rating was set for November 1, which is after finance minister Tito Mboweni, if he keeps his post after the polls, is scheduled to present the next medium-term budget policy statement.

The reprieve gives President Cyril Ramaphosa time to show he can fix Eskom, implement growth-enhancing reforms and boost job creation in an economy with an unemployment rate of more than 27%.

"With this move offering more time for the country to stabilise before the next rating some time in November, the news is positive for the rand and JSE," FXTM research analyst Lukman Otunuga wrote in a research note.

The rand was 1.2% firmer at R14.1692/$ by 5:30pm on Monday, having gained as much as 2.4%, the most since January 4.

The currency is up 1.25% in 2019 to date against the dollar, compared to a 3.56% drop by the Turkish lira.

SA’s currency reached the strongest level in almost a month against the British pound, before being 1.7% higher at R18.576/£. It appreciated 1.4% to R15.9015/€.

While the Moody’s decision gave a boost to the rand, SA assets had remained vulnerable to the possibility of a resumption in load shedding and sluggish economic growth, said Monex Europe market analyst Simon Harvey. Derivatives trading showed that investors are still braced for more volatility in the local currency, with two-month implied volatility, which covers the election period at 17%, second most after the lira.

Options that give investors the right to sell the rand against the dollar over the next six months cost 3.75 percentage points more than those that give the right to buy it, compared with 3.13 percentage points in January, signalling that traders are betting on a weaker rand in that period.

While the JSE gained more than 7% in the first three months of 2018, it still underperformed global markets and was underpinned by a 14.7% gain by Naspers and resources stocks that benefited from higher commodity prices.

"Anyone who is still overweight resources deserves a medal, because they got destroyed in 2015 and looked dead and buried," said Vestact CEO Paul Theron.