The rand recovered this year\’s losses as investors braced for a market-friendly outcome in South Africa\’s May 29 election. The local benchmark stock index also closed at its highest level in more than nine months.
Some investors were originally worried that a poor performance by the ruling African National Congress might create the risk of an unpredictable coalition government coming to power. But the Ipsos poll on April 26 was a turning point.
A recently released Ipsos poll shows that although the African National Congress may lose its majority position, it may be able to avoid forming a coalition government with a party that is not so friendly to the market. Brendan McKenna, emerging market foreign exchange strategist at Wells Fargo, said.
Optimism about the degree of policy continuity after the election has driven USD/Rand lower over the past few weeks.
The rand rose 0.4% against the dollar on Monday to 18.3699, its highest closing level since December 29 last year.
This is the first time South Africa has entered a general election without a direct winner since the end of white rule three decades ago.
A series of polls show that the ANC may lose its majority in the May 29 vote and may have to form an alliance with one or more opponents to remain in power.
South Africa\’s rand regains ground lost this year, people have optimistic expectations for election results
The rand recovered this year\’s losses and the local benchmark stock index closed at its highest level in more than nine months as investors braced for a market-friendly outcome in South Africa\’s May 29 election.
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