As talks for a unity government continue, the South African Rand strengthens

Days before the country’s first legislative session, political parties in South Africa maintained their discussions to try and establish a government of national unity. This resulted in a boost for the rand in early trade on Tuesday.

The rand was up 0.44% from its previous finish at 18.6450 against the dollar at 07:25 GMT.

For the first time since taking power at the end of apartheid 30 years ago, the African National Congress (ANC) said last week that it will seek to create a government of national unity after losing its parliamentary majority in an election in May.

Pro-business Democratic Alliance (DA) and Marxist Economic Freedom Fighters (EFF) are possible allies.

In a research note, Rand Merchant Bank analysts predicted that “the ongoing talks will remain at the front of investors’ minds ahead of Friday when the National Assembly will hold its first sitting.”

The speaker, deputy speaker, and the future president will be chosen in addition to the swearing in of new legislators.

Early trades saw strength in South Africa’s benchmark 2030 government bond, which saw its yield drop 4.5 basis points to 10.33%.