South African rand gains as unity government talks continue

JOHANNESBURG (Reuters) -The South African rand gained on Tuesday, as political parties continued talks to try and form a government of national unity in the country, days away from the first sitting of lawmakers.

At 1550 GMT, the rand traded at 18.6450 against the dollar, 0.44% stronger than its previous close.

The African National Congress last week said it would look to form a government of national unity after it lost its parliamentary majority in an election in May, the first time since it came to power at the end of apartheid 30 years ago.

Potential partners include the pro-business Democratic Alliance and the leftist Economic Freedom Fighters.

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

New lawmakers will be sworn-in, and the speaker, deputy speaker and next president will be elected.

On the stock market, the Top-40 index closed down 0.2%.

South Africa’s benchmark 2030 government bond was stronger, with the yield down 9.5 basis points to 10.28%.

(Reporting by Tannur Anders with additional reporting by Bhargav Acharya; Editing by Rashmi Aich and Rod Nickel)


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