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The domestic currency saw volatility around South Africa’s elections on investor uncertainty, but has now strengthened towards R18.00/USD as the establishment of a new government has proceeded peacefully and successfully.
President Ramaphosa is being sworn in for his second term today as President of South Africa. The formation of the Government of National Unity (GNU) has proceeded peacefully, giving the domestic currency a strengthening momentum.
The rand reached R18.21/USD on Friday, R18.11/USD today, and is likely to see further momentum towards the key R18.00/USD resistance level, although it will be a difficult barrier for the domestic currency to sustainably break through.
Yesterday the ANC issued a statement, noting “(f)ive parties have officially signed the Statement of Intent to participate in the GNU: The ANC, Democratic Alliance (DA), Inkatha Freedom Party (IFP), GOOD, and the Patriotic Alliance (PA).“
“This collaborative effort is rooted in our shared commitment to uphold the Constitution, promote non-racialism, and ensure social justice and equity for all South Africans.”
“Discussions with other parties are ongoing in the spirit of inclusivity. The ANC once again takes this opportunity to invite political parties who resolved to define themselves outside this effort to reconsider and join the GNU.”
“This collective represents 273 seats in the National Assembly (NA) or 68% of the seats in the NA. This collaborative initiative is founded on core principles, including upholding the Constitution and Rule of Law”.
“The modalities of the GNU ensure representation and decision-making by all participating parties, safeguarding consensus-building and conflict resolution mechanisms”.
With South Africa’s election outcome seen as promoting stability, democracy and unity, financial markets attention will likely turn to the US interest rate cut timing, and see modest volatility on related upcoming US data releases.
About the author
![Annabel Bishop](/content/dam/south-africa/content-hub/author-headshots/about-the-author/annabel-bishop-awards-single-image.jpg)
Annabel Bishop
Chief Economist of Investec Ltd
Annabel holds an MCom Cum Laude (Economics and econometrics) and has worked in the macroeconomic, risk, financial market and econometric fields, among others, for around 25 years. Working in the economic field at Investec, Annabel heads up a team, which focusses on the macroeconomic, financial market and global impact on the domestic environment. She authors a wide range of in-house and external articles published both abroad and in South Africa.