By SVEN LUNSCHE

RESERVE Bank governor Chris Stals said on Friday the rand's current strength could continue for another few months after its average weighted value rose 2% in January.

"The relative strength of the rand could continue for another few months. What we are looking for is a more stable exchange rate," he said from Davos, Switzerland, where he is attending the World Economic Forum.

Stals told Reuters that the Bank would "lean against the wind" in the foreign exchange market if the rand rose too fast against the dollar. The bank had already bought dollars on the market in January, he said.

He said the rand's recent strength was mainly the result of more positive expectations.

"It looks like foreign investors are showing a new interest in portfolio investment in South Africa," he said.

Reserve Bank sources on Friday, however, dispelled speculation the government would accelerate its plans to ease foreign exchange controls.

"Apart from the usual discussion with the Department of Finance on exchange controls we have not been told that a specific announcement in imminent," said a senior Bank official.

However, the noises emanating from the Bank recently have been the most positive in a while.

The appointment of James Cross as deputy governor has been widely welcomed by financial markets and contributed to the rise of the rand to a two- month high this week.

On Friday the currency closed at R4,565 against the US dollar, 1c down from the R4,555 close on Thursday. The rand, however, failed for the third time to breach the critical R4,55 level.

Since the beginning of the year the currency has risen from R4,70 to the dollar and improved from R8 to R7,31 against the pound.

On Friday Cross said renewed foreign inflows and a stronger rand were encouraging economic signs. But he cautioned that the authorities wanted to be sure inflows were sustainable before contemplating an easing of exchange control regulations.