JOHANNESBURG (Reuters) -South Africa's rand was steady on Thursday, as markets awaited the outcome of a meeting between senior African National Congress (ANC) leadership figures on the future of the country's government.
At 1534 GMT, the rand traded at 18.9275 against the dollar, about 0.07% firmer than its previous close. The local currency tumbled the day before when the ANC said it would try to form a government of national unity.
"Traders are likely to remain on edge until there is some certainty on the way forward, and we expect trading in the rand to be fairly volatile and headline-driven in the short term," said Andre Cilliers, currency strategist at TreasuryONE.
The party's National Executive Committee was holding high-stakes internal talks on Thursday to discuss options.
The ANC lost its majority in the May 29 election for the first time since coming to power 30 years ago. It said on Wednesday that it had met with all interested parties keen to contribute ideas to form a government.
This includes the left-wing Economic Freedom Fighters (EFF) and pro-business Democratic Alliance (DA).
"We believe market is underpricing tail risks of a leftist policy shift following elections," said JPMorgan analysts in a research note.
"ANC alliance partners have expressed that they do not prefer cooperating with the DA. Uncertainty remains very high."
The DA told Reuters on Wednesday that it would not join a government that would include the uMkhonto we Sizwe (MK) party, the Patriotic Alliance (PA) and the EFF in the executive.
On the stock market, the Top-40 index closed up 0.5%.
South Africa's benchmark 2030 government bond was stronger, with the yield down 8.5 basis points at 10.645%.
(Reporting by Bhargav Acharya and Tannur Anders;Editing by Christina Fincher and David Evans)
