The Rand depreciates while South Africa awaits the announcement of Ramaphosa's cabinet
The rand saw a late weakening on Wednesday as South Africa awaited President Cyril Ramaphosa's cabinet announcements.
By 5pm on Wednesday, the rand was trading around R18.22 against the dollar, marking a more than 0.1% decline from its previous close. It continued to weaken, reaching approximately R18.27 against the dollar by 8:45am on Thursday.
Against other major global currencies, the rand also showed weakness, trading at about R19.56 against the euro and R23.13 against the pound.
Ramaphosa's impending cabinet appointments have kept financial markets and the public on edge, with expectations for the new cabinet lineup under a government of national unity involving 10 political parties.
Ramaphosa is anticipated to announce the cabinet either late Thursday or possibly extending into Friday, contingent on final agreements between the ANC and its coalition partners, particularly the DA, the largest partner in the government of national unity. The DA has demanded at least 11 ministries, the deputy presidency or a ministerial role in the presidency, and autonomy in appointing their own directors-general.
Market analyst Zain Vawda from OANDA suggested that appointing DA members could potentially strengthen the rand against global currencies, while reappointing familiar ANC figures might have the opposite effect. Investors are particularly attentive to key portfolios such as finance, trade, industry, and competition.
Bank of America (BofA) has expressed a bearish outlook for the rand, citing political uncertainties amidst negotiations between the DA and ANC. BofA forecasts a potential decline in the rand to around R18.40 against the dollar in the third quarter but anticipates a potential strengthening in the fourth quarter as US interest rate cuts draw nearer.
By 5pm on Wednesday, the rand was trading around R18.22 against the dollar, marking a more than 0.1% decline from its previous close. It continued to weaken, reaching approximately R18.27 against the dollar by 8:45am on Thursday.
Against other major global currencies, the rand also showed weakness, trading at about R19.56 against the euro and R23.13 against the pound.
Ramaphosa's impending cabinet appointments have kept financial markets and the public on edge, with expectations for the new cabinet lineup under a government of national unity involving 10 political parties.
Ramaphosa is anticipated to announce the cabinet either late Thursday or possibly extending into Friday, contingent on final agreements between the ANC and its coalition partners, particularly the DA, the largest partner in the government of national unity. The DA has demanded at least 11 ministries, the deputy presidency or a ministerial role in the presidency, and autonomy in appointing their own directors-general.
Market analyst Zain Vawda from OANDA suggested that appointing DA members could potentially strengthen the rand against global currencies, while reappointing familiar ANC figures might have the opposite effect. Investors are particularly attentive to key portfolios such as finance, trade, industry, and competition.
Bank of America (BofA) has expressed a bearish outlook for the rand, citing political uncertainties amidst negotiations between the DA and ANC. BofA forecasts a potential decline in the rand to around R18.40 against the dollar in the third quarter but anticipates a potential strengthening in the fourth quarter as US interest rate cuts draw nearer.
