At 1558 GMT the rand traded at 18.8800 against the U.S. dollar, near its previous close of 18.8825.
The South African currency strengthened on Wednesday after consumer inflation fell for a second consecutive month to 5.1% year-on-year in December.
The South African Reserve Bank (SARB) on Thursday kept its key lending rate unchanged, saying it did not yet see a clear disinflation trend that would justify cutting rates.
All 20 economists polled by Reuters forecast that the rate would be left unchanged at 8.25%.
Analysts at Nedbank echoed sentiments shared by central bank governor Lesetja Kganyago that the SARB would maintain a hawkish tone until inflation edged closer to its preferred target of 4.5%.
"The upside risks to the inflation outlook... emanating from a vulnerable rand and rising geopolitical tensions will drive the SARB to adopt a 'wait and see' approach before commencing its cutting cycle," the analysts said in a research note.
Producer price inflation for December slowed to 4.0% year-on-year in December from 4.6% in November, statistics agency data earlier in the day showed.
On the stock exchange, the blue-chip Top-40 index closed more than 0.5% lower. South Africa's benchmark 2030 government bond was little changed, with the yield down 0.2 basis point at 9.748%.
(Reporting by Nellie Peyton and Bhargav Acharya; Editing by David Goodman and Jan Harvey)
