JOHANNESBURG (Reuters) -The South African rand edged lower on Wednesday, as an announcement on President Cyril Ramaphosa’s cabinet appeared imminent amid uncertainty over key appointments in the executive.
At 1541 GMT, the rand traded at 18.2450 against the dollar, 0.1% weaker than its previous close.
The African National Congress (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 the new cabinet, after 10 political parties signed up to form a government of national unity(GNU).
Ramaphosa and the pro-business Democratic Alliance (DA) are on the verge of reaching an agreement on the composition of the cabinet, local newspaper BusinessDay reported.
According to the report, Ramaphosa has concluded talks with the DA – the market favourite – and other signatories of the GNU.
“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.
Markets will keep an eye on key portfolios like finance, trade, industry and competition and small business development, Vawda said.
Officials from the ANC and the DA told Reuters that an announcement could come on Wednesday or Thursday with the latter now appearing more likely.
Focus is also turning to economic data. South Africa will report monthly producer inflation figures on Thursday while money supply and trade and budget balance data are expected on Friday.
“High volatility is expected as market participants navigate a busy economic calendar,” said Nkosilathi Dube, a financial market analyst at Trive South Africa.
On the stock market, the Top-40 index closed 0.5% lower.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 3 basis points at 9.825%.
(Reporting by Tannur Anders and Bhargav Acharya; Editing by Michael Perry and Emelia Sithole-Matarise)
