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SOUTH AFRICA: Cabinet Negotiations Hit Snag But DA Resolves To Continue Talks

SOUTH AFRICA
  • South African assets came under pressure as cabinet talks appeared to be on the verge of collapse, with Bloomberg reporting that the African National Congress (ANC) withdrew its offer to appoint a Democratic Alliance (DA) MP as Trade and Industry Minister, replacing it with a less prestigious Tourism portfolio. This came amid the publication of leaked letters exchanged between ANC's Ramaphosa and DA's Steenhuisen, which shed light on the key areas of contention. The Daily Maverick reported that an emergency meeting of the DA's Federal Executive (FedEx) convened last night resolved to continue negotiations with the ANC over the weekend, hoping to reach an agreement in the coming days.
  • Patriotic Alliance (PA) leader Gayton McKenzie said that the DA may have pushed the ANC "too far" in cabinet negotiations, forcing him to reject some of their demands. He said it was worrying that delays in negotiations were creating a cabinet vacuum a month after the elections, while expressing hope that talks could conclude on Friday.
  • Private sector credit in South Africa rose 4.26% Y/Y in May versus +4.50% expected, while M3 money supply grew 4.72% Y/Y. Trade balance (BBG est. +ZAR15.0bn) and budget balance (BBG est. -ZAR1.3bn) will be published at 13:00BST/14:00SAST.

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