The rand closely tracks the euro and worries about mounting debt among the block's members have hit the currency of Africa's largest economy, which relies heavily on Europe for trade.

The rand firmed half a percent to 8.424 against the dollar at 0543 GMT from Monday's New York close of 8.4750.

"What is helping the rand is the Citibank world bond index announcement," said Ion de Vleeschauwer, a trader at Bidvest Bank said on the news that hit markets on Monday.

South Africa will join Citi's influential World Government Bond Index (WGBI) from October, conferring an important seal of approval on the continent's biggest economy after recent credit outlook downgrades.

Inclusion in the index should help Pretoria's borrowing plans for its multi-billion dollar infrastructure drive it says will fuel economic growth after a 2009 recession, helping narrow the budget deficit to about 3 percent of GDP by 2014 from 4.6 percent this year.  

"But persistent euro weakness, will result in rand weakness. There is no doubt about it," added De Vleeschauwer.

The yield on the benchmark three-year note slid 2.5 basis points to 6.24 percent and that on the 14-year bond was unmoved at 8.31 percent.