The South African rand showed signs of recovery in early trading on Tuesday, regaining some of the losses it incurred the previous day. At 0706 GMT, the rand was trading at 19.44 to the dollar, up by 1% after a significant drop of approximately 2.7% on Monday. The focus of market attention remains on the future of the country’s multi-party government, particularly following recent disagreements between the two largest political parties in the ruling coalition.
On Monday, senior officials from the African National Congress (ANC) and the Democratic Alliance (DA) held meetings to discuss the next steps after failing to reach a consensus on the national budget. Despite weeks of negotiations, the two parties could not align on a shared strategy, leading to the DA, which advocates for pro-business policies, voting against the fiscal framework in parliament. In response, some figures from the ANC have called for the DA to leave the governing coalition.
At 0900 GMT, the ANC is scheduled to brief the media on the results of their discussions. A spokesperson for the DA confirmed that its Federal Executive met on Monday but stated that no decision had been made regarding the party’s position in the coalition, known as the Government of National Unity.
According to local news outlet Eyewitness News, the ANC has decided to continue negotiations with its coalition partners, including the DA, and has initiated outreach for further talks.
In the bond market, the 2030 government bond saw slight improvement, with its yield dropping by five basis points to 9.325% in early trading.
