JOHANNESBURG (Reuters) -The South African rand strengthened on Wednesday, as investors waited for collaboration signs between parties trying to form a government of national unity before lawmakers' swearing in on Friday.
At 1528 GMT, the rand traded at 18.40 against the dollar, nearly 1% stronger than its previous close.
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 before Friday when lawmakers will be sworn in and the president elected.
"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.
On the stock market, the Top-40 index closed 1.3% higher.
South Africa's benchmark 2030 government bond was stronger, with the yield down 9.5 basis points to 10.185%.
(Reporting by Tannur Anders with additional reporting by Bhargav Acharya; Editing by Bernadette Baum and Tomasz Janowski)
