South Africa’s currency rand maintained its stability in early trading on Monday. Investors were eager for further details from ongoing discussions among political parties regarding the establishment of a national unity government.
Last week, the African National Congress (ANC) extended a wide-reaching invitation to other parties to join a new government, following its loss of majority in last month’s election, marking a significant departure from the post-apartheid era.
The ANC has remained open to collaborating with any party, with potential partners spanning a wide spectrum, from the pro-business Democratic Alliance to the hard-left Economic Freedom Fighters. At 0716 GMT, the rand was trading at 18.90 against the U.S. dollar, maintaining the same level as Friday’s closing.
South Africa’s rand plummeted as election projections revealed a significant drop in support for the ruling African National Congress (ANC), sparking concerns about potentially chaotic coalition negotiations and causing unease among investors.
The currency experienced a sharp decline of up to 1.7%, trading at 18.7287 per dollar as of 10:20 a.m. in Johannesburg last week.
Concurrently, the yield on local-currency bonds maturing in 2035 surged by 19 basis points to 12.24%, indicating a jittery response from the financial markets to the election developments.