At 1536 GMT, the rand traded at 18.1225 per dollar, 0.47% weaker than its previous close.
The U.S. dollar index, which measures the dollar against six other major currencies, slipped over 0.1%, inching down from a six-week high hit on Friday after a flurry of economic data reinforced market expectations of tighter monetary policy from the Federal Reserve.
Finance Minister Enoch Godongwana will deliver his 2023 budget speech on Wednesday.
As well as presenting updated revenue, expenditure and economic growth forecasts, he is expected to outline a plan for the government to take on part of the debt of struggling state power utility Eskom.
The chief executive of state power utility, Andre de Ruyter, said on Monday record "Stage 6" outages, involving 10 hours daily without power, were expected to last until the peak hours late on Wednesday.
Eskom has implemented power cuts every day this year, following 2022 when it had the highest number of days with outages.
Also this week, global watchdog the Financial Action Task Force (FATF), which sets standards on combating money laundering and illicit financing, could add South Africa to its "grey list" at meetings scheduled to happen in Paris.
Being added to that list would be a reputational knock for South Africa and could hurt local asset prices, as grey-listed countries are subject to greater monitoring by the FATF on concern that they are at higher risk for money laundering and terrorist financing.
On the stock market, the Top-40 and the broader all-share closed around 0.7% higher, helped by gains in the resources index.
However, shares in Anglo American Platinum (Amplats) fell almost 2% to the bottom of the Top-40 index after the platinum group metals (PGM) miner reported a 38% fall in annual profit and said power cuts could dent output this year.
The government's benchmark 2030 bond was weaker in afternoon deals, with the yield up 7.5 basis points at 10.190%.
(Reporting by Alexander Winning and Anait Miridzhanian; Editing by Bradley Perrett and Christina Fincher)
