South African rand claws back some losses on reports cabinet talks progress
2024.06.25 03:19
JOHANNESBURG (Reuters) – The South African rand clawed back some losses in early trade on Tuesday, as local media reported progress in negotiations over cabinet positions between the two biggest parties in the unity government.
At 0650 GMT, the rand traded at 18.0750 against the dollar, more than 0.2% stronger than its previous close. The currency fell about 0.8% against the dollar on Monday.
Markets have been on tenterhooks in the lead-up to the announcement of President Cyril Ramaphosa’s new cabinet, with signs of friction between the African National Congress (ANC) and the Democratic Alliance (DA) on Monday contributing to the rand’s fall.
But local news outlets including News24 said talks between the ANC and DA were moving forward after a meeting between Ramaphosa and DA leader John Steenhuisen on Monday. News24 reported a deal may be reached soon which would allow Ramaphosa to announce his executive by Wednesday.
“Market participants are likely to focus on how many and which ministerial positions the pro-business Democratic Alliance will get in the new cabinet. The more and the more senior, the better (for markets),” Commerzbank (ETR:) analysts said in a research note.
The ANC lost its parliamentary majority in an election last month, forcing it to share power for the first time since coming to power at the end of apartheid 30 years ago.
In total 10 political parties have agreed to join the unity government.
South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 7 basis points to 9.785%.
