On Saturday, the rand rose against the dollar, surpassing the R17 mark as the African National Congress (ANC) and the Democratic Alliance (DA) negotiate the creation of a Government of National Unity.
At 10:20 a.m. on Saturday, the rand was trading at approximately R17.87 against the dollar.
The ZAR was trading at roughly R18.23 per dollar at the close of business on Friday.
By midday Saturday morning, the rand was trading at approximately R19.51 to the euro and R23.01 to the pound.
IFP President Velenkosini Hlabisa has urged the ANC and DA to complete negotiations on forming a unified government, expressing worry about the current impasse.
This call comes after IOL reported on Thursday that negotiations between the ANC and the DA had collapsed over cabinet selections.
Hlabisa spoke to the media from the IFP offices in Durban, stating that while initial delays were expected, the extended standoff was now concerning.
“So when alarmist reports began to emerge of a potential stalemate between the ANC and the DA, the IFP was not immediately concerned. There was, as far as we could see, no crisis. We understood that there would be necessary teething problems in forming the government of national unity… Now, however, like all South Africans, the IFP is growing concerned,” he said.
Since President Cyril Ramaphosa’s inauguration in Pretoria last week, cabinet slots have been a source of contention in the negotiations.
The two parties met on Friday to discuss their differences, but no new information has been provided thus far.
According to Casey Sprake, an investment analyst at Anchor Capital, the rand’s recent volatility is due to the revival of internal political issues, including ANC-DA negotiations.
“Both the country and financial markets are eagerly awaiting the announcement of the Cabinet for the seventh administration under the newly formed government of national unity,” she said.
“On a month-to-date basis, the rand has lost 1.88% against the dollar, driven by ongoing concerns around the formation of the new presidential cabinet”.
She concluded that this puts the rand marginally ahead of Brazil and Mexico, which are currently at the bottom of the Emerging Markets ladder.
