JOHANNESBURG: The South African rand was little changed in early trading on Wednesday, as investors waited for collaboration signs between parties trying to form a government of national unity before lawmakers swear the oath of office on Friday.

At 0703 GMT, the rand traded at 18.60 against the dollar , near its previous close of 18.58.

The African National Congress (ANC) last week said it would look to form a government of national unity after it lost its parliamentary majority in an election in May for the first time since it came to power at the end of apartheid 30 years ago.

The ANC’s potential collaboration partners range from the pro-business Democratic Alliance (DA) to the leftist Economic Freedom Fighters (EFF).

Markets will look for hints on who will form the government of national unity before Friday when lawmakers will be sworn in and the president elected.

South African rand gains as unity government talks continue

“The composition of the future government is crucial for the (rand), as it largely determines the prospects for reform. Further reforms are urgently needed, especially in the areas of energy and infrastructure,” Commerzbank said in a note.

The risk-sensitive rand could also take cues from inflation data out US on Wednesday and the Federal Reserve’s updated economic projections.

South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 3.5 basis points to 10.245%.