The South African rand steadied against the US dollar on Tuesday ahead of Wednesday’s elections for parliament and provincial legislatures, which will determine the next president.
Stocks weakened as investors waited for direction.
At 1510 GMT, the rand traded at 14.4500 per dollar, unchanged from its New York close on Monday.
While a victory for the ruling African National Congress (ANC) is almost certain, its majority is likely to shrink, which could constrain President Cyril Ramaphosa’s reforms and keep the economy on a slow burn.
“Markets expect a rally on a strong ANC win, with potentially marked rand strength,” Investec economist Annabel Bishop said in a note.
“However, in order to shift the full focus of internal party politics to the economy, particularly job creation driven by strong economic growth, will likely require some patience at best, and repair and improvements to governance in government structures is also needed.”
In fixed income, the yield on the benchmark government bond due in 2026 added 2 basis points to 8.6%.
On the bourse, the blue-chip Top-40 share index fell 1.2% to 51 707 points while the broader All-Share index was down 1.03% at 58 110 points.
“Ahead of the elections there is just too much uncertainty so there are a lot of people sitting on the sidelines,” said Greg Davies, equities trader at Crates Capital.
Among the biggest declines were general retailers, which fell 2.55%.
Massmart closed down 3.99% to R87.50, Truworths fell 3.68% to R76.10 and TFG weakened 3.63% to R189.55.