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STORY: ::June 2, 2024

The South African rand fell on Tuesday (June 4) as uncertainty around possible coalition partners persisted following last week's election.

That vote saw the African National Congress lose its majority in parliament after 30 years of dominance.

It is still the largest party, but cannot govern alone.

The ANC was holding high-stakes internal talks on Tuesday about which parties it should approach to form South Africa's next government.

::May 29, 2024

Potential partners range from the pro-business Democratic Alliance and the socially conservative Inkhata Freedom Party to former president Jacob Zuma's populist uMkhonto we Sizwe, known as MK, and the Marxist Economic Freedom Fighters.

An alliance between the ANC and MK or the EFF would likely alarm financial markets and foreign investors.

On Tuesday afternoon the rand was trading about 0.7% weaker than its closing level on Monday (June 3).

Shaun Murison, a senior market analyst at IG, said the rand was "erring on the side of caution" and "pricing in some of the economic risks a business unfriendly coalition may provide."

::May 26, 2024

The ANC and the Democratic Alliance, however, are not easy bed fellows.

An alliance could be a bitter pill for supporters of both sides to swallow, says political analyst Zwelinzima Ndevu.

"Tthey will have to come up with a very clear explanation I think they will talk about stability of the country. They will talk about ensuring that there is continuity, they will talk about things such as the possibilities of economic growth, and so forth and so forth."

Political parties have two weeks to work out a deal before the new parliament sits.

Its first job will be to choose a new president.

That's likely to be incumbent President Cyril Ramaphosa as the ANC remains the biggest force.

However, he may come under pressure to quit or prepare for a succession given his party's disappointing performance.