The South African rand continued its decline on Tuesday, trading at 18.6325 against the dollar, a 1.5% drop from the previous close. This follows a volatile start to the week as markets await the new government of national unity’s approach to economic reforms.
President Cyril Ramaphosa’s African National Congress (ANC) lost its parliamentary majority in the May 29 election, leading to a coalition with former rivals to maintain power. The initial market optimism over the new cabinet, which includes former opposition leader John Steenhuisen as agriculture minister, faded, and recent dollar strength also impacted the rand.
ETM Analytics noted that the market is looking for clear economic reform signals from the government. The rand, sensitive to global influences like U.S. monetary policy and political events, was also affected by rising momentum behind Donald Trump’s re-election campaign and a recent Supreme Court ruling.
On the Johannesburg Stock Exchange, the Top-40 index closed down 0.3%, while South Africa’s benchmark 2030 government bond saw a slight improvement, with the yield decreasing by 0.5 basis points to 9.95%.
Source: Reuters