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South African Assets Signal Rising Anxiety as Election Nears

  • Rand volatility climbs as traders anticipate two-way risks
  • Yield curve steepens, indicating longer-term policy concerns
The face of Cyril Ramaphosa, South Africa's president, is displayed on the side of a campaign truck during a campaign event in Bloemfontein on April 7. 

The face of Cyril Ramaphosa, South Africa's president, is displayed on the side of a campaign truck during a campaign event in Bloemfontein on April 7. 

Photographer: Waldo Swiegers/Bloomberg
Updated on

South African assets are signaling increasing investor anxiety about Wednesday’s election, with the fate of the rand and government bonds tied to the extent of the ruling African National Congress’ expected majority and what that implies for policy.

President Cyril Ramaphosa needs a strong mandate to push through fiscal and policy reforms in the face of opposition from factions within his party. But while a convincing majority may give assets a brief boost, the difficulty of the road ahead is making investors wary.