JOHANNESBURG: The South African rand was stronger in early trade on Thursday as government of national unity (GNU) talks progressed.
At 0709 GMT, the rand traded at 18.35 against the dollar, about 0.2% stronger than its previous close.
On Wednesday, South Africa’s Inkatha Freedom Party (IFP) said it will join a unity government with the African National Congress (ANC) and the Democratic Alliance (DA) after no party managed to secure a parliamentary majority in last month’s elections.
Markets favour a government that includes the pro-business DA.
“Investors are waiting for any signs of a formal agreement between the various political parties forming of a government of national unity,” said Rand Merchant Bank analysts in a research note.
South African rand stable, focus on unity government talks
The ANC and DA’s senior leadership will both meet on Thursday.
Parties are in a race against time to secure a deal before the newly elected parliament sits on Friday.
South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 4.5 basis points to 10.23%.
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