At 1600 GMT, the rand traded at 16.9950 against the dollar, 0.9% stronger than its previous close.
President Cyril Ramaphosa's re-election as the leader of the governing African National Congress party earlier this week calmed market jitters among local investors and helped boost the rand, after a volatile year.
The risk-sensitive rand often takes its cues from global drivers such as the U.S. monetary policy in the absence of major local events.
"Although the rand has ended this year much weaker than when it started, much of that was driven by the dollar's strength," ETM Analytics said in a research note.
"The dollar remains overvalued and needs to correct, implying that 2023 could well be the year that the rand stages an impressive performance against the dollar," analysts added.
Stocks on the Johannesburg Stock exchange rose slightly, with the Top-40 index ending 0.33% higher, while the broader all-share index closed up 0.37%.
The government's benchmark 2030 bond was unchanged, with the yield at 10.170%.
(Reporting by Anait Miridzhanian and Bhargav Acharya; Editing by Rashmi Aich and Shailesh Kuber)
