(Adds latest prices, analyst comments)
JOHANNESBURG, Feb 5 (Reuters) - South Africa's rand firmed on Friday to end the week in the black, boosted by signs of a smaller fiscal deficit and faster procurement of COVID-19 vaccines ahead of the budget speech later in the month.
At 1500 GMT the rand ZAR=D3 was 0.63% firmer at 14.9100 per dollar, not far off the two-week best of 14.8950 it touched earlier in the week, and bringing gains to around 1.5% since the beginning of the month.
Slowing coronavirus infections after a second wave hit late in 2020 and better than expected tax revenues ahead of the Feb. 24 national budget, have soothed sentiment.
"Growth in South Africa is shaping up to be better than initial expectations," said Morgan Stanley (NYSE:MS) analysts in a note. "We move ZAR back to neutral as a positive budget outturn, as we now expect, will likely support the currency through continued bond inflows.
Chief economist at Old Mutual (LON:OMU), Johann Els, said higher-than-anticipated tax revenue could result in a budget surplus as much as 106 billion rand.
"Should even a portion of this windfall be realised, I see no need for government to raise taxes in this case, as has been suggested as a means to fund the vaccine rollout," said Els.
South Africa has the most confirmed coronavirus cases in the continent, with over 1.4 million infections.
After a slow start the country has accelerated vaccine purchases. On Friday the health ministry said it had secured vaccines for at least 26 million people. stock market moved up for the third consecutive day in a rally largely broad-based, taking the main index close to its all-time high seen last month.
The market has been bullish in the last three days as falling coronavirus cases in the country have brightened prospects of a faster economic recovery.
The benchmark all-share index .JALSH closed up 0.79% to end at 64,289 points and the blue-chip top-40 companies index .JTOPI ended up 0.66% to 58,877.
The benchmark index touched an all-time peak on Jan. 25 of 64,557 points.