At 1529 GMT, the rand traded at 15.4700 against the dollar, 0.83% firmer than its previous close.
Last week, the South African Reserve Bank (SARB) raised its main lending rate by 25 basis points in a "measured" move, but its forward guidance was less hawkish than the market had positioned for.
In contrast, bets for U.S. rate hikes increased on a hawkish shift by the Federal Reserve.
"Market expectations on interest rates are likely to eventually become more rational, but sensitivities remain high this quarter," Annabel Bishop, a Chief Economist at Investec, wrote in a note.
Focus in the week remained on central banks, with key Australian, UK and European central bank meetings taking place in the days ahead.
Locally, the trade surplus narrowed to 30.14 billion rand ($1.94 billion) in December from a surplus of 35.83 billion rand in November.
In the equity market, stocks were buoyed by mobile operator MTN Group, tech stocks and a rise in commodity prices, with the Johannesburg All-Share index up 1.16% to 74,304 points, while the Top-40 index climbed 1.19% to 67,820 points.
MTN topped the blue-chip index, surging 10.11% to 191.97 rand, a just over six-year high. Its biggest operation, MTN Nigeria Communications, reported a strong set of full-year financial results on Friday, with margin improvement across the board and a spike in profits.
Oil rose on Monday as a supply shortage and political tensions in Eastern Europe and the Middle East put prices on track for their biggest monthly gain in almost a year.
Meanwhile spot palladium rose 0.6% to $2,390.30 by 1523 GMT, with the auto-catalyst metal set for a monthly gain of nearly 26%, its best since February 2008. Platinum and Silver prices were also up. [GOL/]
Higher prices pushed the mining index up 3.79%, with Impala Platinum topping that index as it closed 5.46% stronger.
In fixed income, the yield on the benchmark 2030 government bond was down 2.5 basis points to 9.400%.
(Reporting by Olivia Kumwenda-Mtambo and Nqobile Dludla; Editing by Rashmi Aich, Kirsten Donovan)
