Following the South African national election results that were announced on Sunday, the rand was trading stronger against the US dollar on Monday morning despite trading weaker against the dollar on Friday.
According to asset management and consulting service Anchor Capital, at 05:30am the US dollar was trading 0.3% lower against the South African rand at R18.73.
The euro was trading 0.3% lower at R20.33 while the British pound had declined by 0.3% against the rand to trade at R23.88.
The local currency has opened the new trading week on a slightly firmer footing despite the uncertainty over what the coalition government is going to look like, according to Andre Cilliers, currency strategist at TreasuryONE
Cilliers said there appears to be little chance of an African National Congress (ANC) and uMkhonto weSizwe (MK) Party coalition at this stage, but the ANC, Economic Freedom Fighters (EFF) and the Patriotic Alliance (PA) would have enough votes to form a government.
The national elections results announcement revealed that the ANC received 159 seats, followed by the DA with 87 seats and the relatively new MK Party with 58 seats. The EFF got 39 seats while the Inkatha Freedom Party (IFP) received 17 seats.
“There is much speculation around a possible ANC/DA coalition, which would probably be the most investor-friendly and good for the rand,” Cilliers said.
“Both parties have hinted at possible upcoming negotiations and the next week or so are going to be interesting with increased volatility in the currency.”
IOL Business