South Africa’s rand was slightly stronger in early trade on Tuesday, building on gains after unity government members were confirmed last week and ahead of talks by U.S. Federal Reserve officials later in the day.
At 0641 GMT, the rand traded at 18.2350 against the dollar, about 0.15% stronger than its previous close.
South Africa’s National Assembly sat for the first time on Friday after last month’s election. Cyril Ramaphosa of the African National Congress (ANC) was re-elected as president.
Five political parties have signed up to join a government of national unity after the ANC lost its majority in the vote, including the pro-business Democratic Alliance which is favoured by markets.
“The formation of a government of national unity is being liked by investors as the new government sets a platform for accelerated infrastructure and other reforms, to get the economy back on track after years of low growth and high unemployment,” Rand Merchant Bank analysts said in a research note.
Traders will on Tuesday look for hints from Fed officials on the future interest rate path of the world’s biggest economy.
Like other emerging market economies, the risk-sensitive rand often takes cues from global factors.
South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 3 basis points to 10.095%.
Reuters
