“There’s been talk of a (US) fiscal stimulus, and if there is a fiscal stimulus, you would like to believe the US authorities will do a\u00a0fiscal stimulus that will be in the best interests of the economy”.<\/p>\n
Kganyago said that the appreciation of the dollar would impact emerging markets like South Africa.<\/p>\n
This will first be noticeable through the trade sector as South African exports should become\u00a0more competitive, he said.<\/p>\n
Secondly, within the finance sector, the appreciation of the dollar will see rising debt burdens. A\u00a0stronger dollar would give the US Federal Reserve room to normalise money policies faster – leading to a further reversal in capital flows to emerging markets, the governor said.<\/p>\n
“Presidents move currencies all the time, it just happens that this one is using Twitter. Others use ordinary speeches and platforms,” Kganyago said of Trump’s use of the social media site.<\/p>\n
“The problem we are facing now is an increasing \u00a0environment of uncertainty,\u00a0which makes determining policy a significant challenge,” Kganyago said.<\/p>\n
“A combination of higher oil prices, an appreciating dollar which leads to a depreciation of emerging market currencies and food prices which are now rebounding from record lows could make for a very challenging monetary policy (in South Africa),” he said.<\/p>\n
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