JOHANNESBURG. – South Africa’s currency experienced the largest decline among emerging markets yesterday, triggering a selloff in the country’s assets due to increasing concerns over the delays in forming President Cyril Ramaphosa’s Cabinet.
The rand fell by 0.8 percent to R18.31 per US dollar as of 10:20 am in Johannesburg, after hitting a low of R18.35.
This put it on track for its lowest closing value since June 14 and marked the worst performance among developing nations this week.
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South Africa’s benchmark sovereign bond yield increased by 12 basis points, the highest in three weeks, and stocks fell for a third consecutive day.
It has been eight days since Ramaphosa’s inauguration, and he still has not established a functional Cabinet, as negotiations between the African National Congress and Democratic Alliance over its composition continue.
In 2019, when Ramaphosa had a parliamentary majority, the Cabinet formation took only five days. Traders are concerned that the current delay could lead to a less favorable outcome from the market’s perspective, despite the ANC stating on Wednesday that an announcement would be made within 48 hours.
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