The South African rand recovered some losses on a report on the progress of cabinet talks By Reuters

Johannesburg – The South African rand recovered some losses in early trade on Tuesday, as media reported progress in talks on Cabinet positions between the two main parties in the federal government.

At 0650 GMT, the rand traded at 18.0750 against the dollar, up 0.2% from its previous close. The currency fell about 0.8% against the dollar on Monday.

Markets were tense when President Cyril Ramaphosa’s new Cabinet was announced, as there were signs of disagreement between the African National Congress (ANC) and the Democratic Alliance (DA) on Monday, which caused the rand to fall.

But local media sources including News24 said that talks between the ANC and the DA are still ongoing after Ramaphosa’s meeting with DA leader John Steenhuisen on Monday. News24 reported that an agreement may be reached soon which will allow Ramaphosa to announce his council on Wednesday.

“Market participants are likely to focus on how many and which ministerial positions the pro-business Democratic Alliance will get in the new cabinet. The bigger they are, the better (for markets),” Commerzbank (ETR:) analysts said in a research note.

The ANC lost its majority in Parliament in the elections held last month, forcing it to divide power for the first time since it came to power at the end of apartheid 30 years ago.

A total of 10 political parties have agreed to join the federal government.

South Africa’s 2030 government bond was stronger in early deals, with the yield down 7 basis points to 9.785%.