South African rand rallies on hope DA and ANC can agree on cabinet posts
11:14 am Friday, June 28th, 2024
JOHANNESBURG (Reuters) -The South African rand rallied on Friday on optimism that the Democratic Alliance (DA) and African National Congress (ANC) would reach an agreement over cabinet positions, a day after local media reported a major disagreement between the parties.
At 1503 GMT, the rand traded at 18.24 against the dollar, about 1.3% stronger than its previous close. The currency fell sharply on Thursday after local media reports suggested that a deal between the two parties was in jeopardy.
A DA party source close to the talks told Reuters on Friday that the party was still committed to negotiations over cabinet posts and was “not at the point of drawing lines in the sand and giving final ultimatums”.
The comments came after the News24 website and the Business Day newspaper had reported that the ANC had backtracked on an offer to give the DA the trade and industry ministerial portfolio, angering the DA.
Inkatha Freedom party, the third largest in the government of national unity (GNU), urged the ANC and DA to resolve their outstanding issues quickly.
Financial markets are on edge over the composition of the cabinet as it will give an early indication of how the ANC intends to share power after the ANC lost its parliamentary majority in an election last month.
“The continued negotiations are certainly welcome, as they suggest that both the ANC and the DA are still intent on making a more centrist GNU work,” said Danny Greeff, co-head of Africa at ETM Analytics
It is still not clear when the cabinet picks will be made public.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed about 1% higher. South Africa’s benchmark 2030 government bond was stronger, with the yield down 14 basis points to 9.985%.
(Reporting by Tannur Anders and Bhargav AcharyaEditing by Alexander Winning, Anil D’Silva, Miral Fahmy and Frances Kerry)
