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Rand weakens over Cabinet uncertainty

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The South African rand weakened in early trade on Wednesday, as markets awaited the announcement of President Cyril Ramaphosa’s Cabinet expected soon, with uncertainty over key appointments in the executive.

File picture: Pexels

JOHANNESBURG – The South African rand weakened in early trade on Wednesday, as markets awaited the announcement of President Cyril Ramaphosa’s Cabinet expected soon, with uncertainty over key appointments in the executive.

At 0639 GMT, the rand traded at 18.31 against the dollar, about 0.45% weaker than its previous close.

The ANC lost its parliamentary majority in an election last month for the first time since the end of apartheid three decades ago, forcing it to share power with smaller rivals.

Financial markets wait with bated breath over the make-up of Ramaphosa’s new Cabinet, after 10 political parties signed up to form a government of national unity. The pro-business DA is a market favourite.

“Appointments from the Democratic Alliance could bolster the rand, while familiar ANC names might have the opposite effect,” said Zain Vawda, market analyst at OANDA, on Tuesday.

Market participants will keep an eye on key portfolios like finance, trade, industry and competition and small business development, Vawda said.

Officials from both the ANC and the DA told Reuters that the Cabinet announcement could take place on Wednesday or Thursday.

South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 2 basis points to 9.875%.

– REUTERS

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