South African rand firms as unity government talks continue

JOHANNESBURG (Reuters) -The South African rand strengthened on Monday, as focus remained on talks between political parties on forming a government of national unity in the country.

The African National Congress (ANC) last week issued a broad invitation to other parties to be part of a new government, after it lost its majority in last month’s election for the first time since the end of apartheid.

The ANC has not ruled out working with any party and its potential partners diverge widely, from the pro-business Democratic Alliance to the leftist Economic Freedom Fighters.

South Africa’s National Assembly will hold its first sitting on Friday, when new lawmakers will be sworn-in, and the speaker, deputy speaker and next president will be elected.

At 1520 GMT, the rand traded at 18.7250 against the U.S. dollar, 0.93% stronger than its previous close on Friday.

Oxford Economics Africa said in a research note that the negotiations between political parties would remain front and centre this week and the rand would be skittish until there was more certainty.

On the Johannesburg Stock Exchange, the Top-40 index closed about 0.9% lower. South Africa’s benchmark 2030 government bond was firmer, with the yield down 16.5 basis points to 10.375%.

(Reporting by Alexander Winning and Bhargav Acharya; Editing by Rashmi Aich and Aurora Ellis)


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