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South African rand gains after president sworn in, stable May inflation

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Updates prices to afternoon trade, adds analyst comment in paragraphs 5 and 6

JOHANNESBURG, June 19 (Reuters) -South Africa's rand strengthened on Wednesday, following the release oflocal inflation figures and the inauguration of PresidentCyril Ramaphosa for a second term.

At 1545 GMT, the rand traded at 17.9725 againstthe dollar ZAR=D3, about 0.48%stronger than its previous close.

Attention was onPretoria, the capital, where Ramaphosa took the oath aspresident after last month's election in which the African National Congress (ANC) lost its majority for the first time since the end of apartheid 30 years ago.

Five political parties have joined the ANC in a government of national unity (GNU)including the pro-business Democratic Alliance, which is favoured by markets.

"Much of the optimism being priced into the rand at the moment is based on the assumptions that the ANC acts in good faith about sharing power and that much-needed growth and fiscal reforms are implemented by the GNU," Danny Greeff, co-head of Africa at ETM Analytics, said.

"The market is facing strong support around 18.0000. A sustained move below that handle would mark a significant break out of the rand's broader trading range... and could trigger some fresh impetus," he said

On Wednesday, data released by the local statistics agency showed that headline inflation was stable at 5.2% year-on-year in May, but analysts do not expect interest rate cuts any time soon as inflation remains above the central bank's desired level.

On the stock market, the Top-40 .JTOPI index closed 1.28% higher.

South Africa's benchmark 2030 government bond ZAR2030= was stronger, with the yield down 11 basispoints to 9.745%.

Reporting by Tannur Anders and Bhargav Acharya; Editing by Barbara Lewis and Leslie Adler


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