At 1303 GMT, the rand traded at 19.5700 against the dollar, over 1.17% stronger than its previous closing level.
It is now back to the level it was before the South African Reserve Bank (SARB) announced a 50 basis point interest rate hike on Thursday.
On Thursday the rand closed down more than 2.7% against the dollar, as some traders had bet on a larger 75 basis point rate hike.
"(Yesterday's) move may have been overdone," Greg Davies, head of wealth at asset manager Cratos Capital, told Reuters.
"It seems the market is settling down away from the panicked move we had yesterday to more realistic levels."
Another factor cited behind the rand's surprise slump on Thursday were comments in the monetary policy statement that the SARB expected further currency weakness ahead.
The central bank has raised interest rates 10 consecutive times since November 2021. The latest hikes its interest rate to a 14-year high, an effort to bring inflation back within its 3%-6% target band from 6.8% in April.
The rand struck a new all-time low of 19.8175 in the early hours of Friday morning. It is down about 1.6% against the dollar since the end of last week.
Shares on the Johannesburg Stock Exchange were weaker. The blue-chip Top-40 index was last 0.14% lower than its previous close while the broader all-share index was down about 0.16%.
South Africa's benchmark 2030 government bond was last stronger, the yield down 5 basis points to 11.115%.
(Reporting by Tannur AndersEditing by Alexander Winning, Promit Mukherjee, William Maclean)
