This after a court ruled that a decision to drop corruption charges against Zuma was irrational.

JOHANNESBURG - The rand extended its gains against dollar on Friday to hit a five-month high after a court ruled that a 2009 decision to drop 783 corruption charges against President Jacob Zuma was irrational and should be reviewed.

The rand hit a high of 14.1650 per dollar at 1003 GMT, its firmest level since 26 November, according to Thomson Reuters data.

"The currency seems exceptionally sensitive to the political situation. We have seen that broad reaction in December with the change of the finance ministers, we saw that reaction which was swift," Global Trader head of trading Nilan Morar said.

TREASURY DG'S CONTRACT EXTENDED

At the same time, Cabinet has extended Treasury Director-General Lungisa Fuzile's contract for another term.

There was speculation late last year that Fuzile was on his way out.

He'd reportedly been told not to reapply for the job.

President Jacob Zuma's reshuffling of finance ministers in December fuelled speculation that Fuzile would also be shown the door.

But during a post-Cabinet media briefing today, Minister in the Presidency Jeff Radebe announced Fuzile's job was safe.

"The extension of the contract is for Lungisa Fuzile as the Director-General of National Treasury. The extension of contract is usually for five years."

Fuzile is said to be close to Finance Minister Pravin Gordhan.

He is also leading a process to determine how much Zuma must repay for non-security features to his Nkandla home.

In March, the Constitutional Court ordered the president to comply with the Public Protector's directives to pay back a reasonable portion of taxpayers' money spent on refurbishing his private home.

Additional reporting by Rahima Essop