Rand strengthens on eve of national election

28th May 2024 By: Reuters

Rand strengthens on eve of national election

Photo by: Creamer Media

The South African rand strengthened a day before a national election on Wednesday which could see the ruling party lose its majority for the first time in 30 years.

At 1605 GMT, the rand traded at 18.2775 against the dollar, around 0.6% stronger than its previous close.

The dollar last traded around 0.12% weaker against a basket of global currencies.

South Africans will vote in national and provincial elections on Wednesday, with polls suggesting the governing African National Congress could lose its parliamentary majority for the first time since the end of apartheid in 1994.

This outcome would force the ANC into a coalition to maintain governing power.

Results are expected to start trickling in late on Wednesday, and markets will likely take direction as the results become clearer into the second half of the week.

"Investors are keenly watching for a stable coalition outcome to avoid ideological swings, especially towards populist parties, which could stabilise South African financial markets," said Andre Cilliers, currency strategist at TreasuryONE.

South Africa's benchmark 2030 government bond firmed, with the yield down 3.5 basis points to 10.525%.