The South African Reserve Bank (SARB) lowered its main lending rate by 25 basis points to 6.25% in a unanimous decision on Thursday, as it lowered its inflation forecasts significantly.
The majority of analysts polled by Reuters had expected no change in rates because of risks associated with a February budget speech and a scheduled review of the country's last investment-grade credit rating by Moody's in March.
The central bank painted a grim picture on the outlook for economic growth, lowering its predictions for this year and next to 1.2% and 1.6% respectively.
At 0713 GMT, the rand traded at 14.3720 per dollar, 0.25% firmer than its previous close.
"The cut was not expected for the most part," said Warrick Butler, executive for rand and emerging market spot trading at Standard Bank.
"Lack of any major move in the rand suggests that either positioning is very light or some of the offshore investors are already hedged. Of course, the continued bias towards emerging market investment also helps."
In fixed income, yield on the benchmark government bond was down 3 basis points to 8.16%.
(Reporting by Olivia Kumwenda-Mtambo; Editing by Subhranshu Sahu)
