South African benchmark bond yields fell to the lowest in 10 months and the rand extended gains after Moody’s chose not to update its investment grade rating on the country’s sovereign debt or the outlook.

Yields on rand-denominated securities due December 2026 fell five basis points to 8.55% by 8.09am in Johannesburg, the lowest since May 30.

The rand led gains in emerging-market currencies, advancing for a second day to trade 1.3% stronger at 14.3077 per dollar.

The lack of news from Moody’s means SA retains its position in Citigroup’s World Government Bond Index for now. An exit from the gauge would spark forced selling of local bonds by investors that track the measure, leading to outflows of as much as $10bn, according to Investec Bank.

“The rand is demonstrating some of the markets’ relief,” said Bianca Botes, a corporate treasury manager at Peregrine Treasury Solutions.

Options traders pruned their short-term pessimism on the South African unit as it rebounded.

The premium of options to sell the rand over those to buy it, known as the 25-Delta risk reversal, fell the most in six months.

Moody’s said its sovereign release calendar indicates dates for potential action only. It rates SA’s foreign- and local-currency debt at Baa3, with a stable outlook.