JOHANNESBURG: The South African rand strengthened on Wednesday ahead of the swearing-in ceremony of ministers in President Cyril Ramaphosa’s new unity government.

At 0741 GMT, the rand traded at 18.47 against the dollar , 0.7% than its previous close.

The rand has faced a volatile week after African National Congress’s (ANC) Ramaphosa on Sunday announced his new cabinet that includes former opposition leader John Steenhuisen of the Democratic Alliance (DA).

While the markets initially cheered a “business friendly” cabinet, uncertainty over how the government of national unity (GNU) would approach reform has kept investors cautious.

“There are already signs that the GNU faces significant obstacles going forward with the two main parties, the ANC and the DA, struggling to find common ground,” said Andre Cilliers, currency strategist at TreasuryONE.

Ministers in the new cabinet will be sworn in by Chief Justice Raymond Zondo later on Wednesday.

South African rand gains after Ramaphosa announces new cabinet

On the stock market, the Top-40 index was 1.3% higher in early trade.

South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 3.5 basis points to 9.91%.