JOHANNESBURG: South Africa's rand extended its gains early on Thursday to a new 27-month best, still supported by global risk demand as investors raised bets the US central bank would lend at low rates for longer.

At 0900 GMT the rand was 0.29% firmer at 13.7250, having earlier touched 13.6775, its strongest level since February 2019.

The rand is the best-performing currency against the dollar to date in 2021, advancing nearly 7%.

A host of Fed officials this week echoed the sentiments of Chair Jerome Powell that a spike in inflation would be transient and ultra-easy policy continued to be warranted.

Lower US interest rates boost the appeal of riskier but high-yielding assets such as the rand.

"The rand has continued appreciating over the course of the week. Having breached beyond the 13.8000 technical support level, its next short-term objective is around the 13.6000 level," said analysts at Nedbank in a note.

"The latest moves are not attributable to local factors but to comments from the Fed yesterday."

Bonds were weaker, with the yield on the benchmark 2030 government issue adding 5 basis to 8.945%.