The global economy is at risk of splintering under US President Donald Trump\u2019s policy onslaught, the head of South Africa\u2019s central bank warned.<\/p>\n\n\n\n
\u201cWe are seeing trade fragmentation, we are seeing economic fragmentation and it just raises the level of uncertainty,\u201d said South African Reserve Bank Governor Lesetja Kganyago on Monday, ahead of a Group of 20 meeting of finance chiefs and central bank governors in Cape Town Wednesday.<\/p>\n\n\n\n
The US president has battered financial markets with an array of threatened tariffs on products including steel, aluminum and cars, as well as on specific countries such as China.<\/p>\n\n\n\n
\u201cThis heightened uncertainty has got implications for global trade and thus has implications for the global economy,\u201d Kganyago said in a Bloomberg interview. \u201cIt makes policymaking a big challenge.\u201d<\/p>\n\n\n\n
Trump\u2019s also frozen aid to South Africa over false claims about land seizures and US Treasury Secretary Scott Bessent is skipping the G-20 meeting this week.<\/p>\n\n\n\n
Secretary of State Marco Rubio did the same at the foreign ministers\u2019 gathering last week in Johannesburg. South Africa currently chairs the G-20, which returns to the US in 2026.<\/p>\n\n\n\n
The SARB, which lowered borrowing costs 25 basis points to 7.5% last month, warned at the time that a trade war could unmoor inflation and even push central banks \u2014 including in the US \u2014 to reverse recent interest-rate cuts. It also argued for policy caution.<\/p>\n\n\n\n
\u201cThe only thing that a small open economy can do is to strengthen its resilience, build the buffers, because this thing would come as a shock,\u201d he said.<\/p>\n\n\n\n
Closer to home, Kganyago said a proposed two percentage point hike in South Africa\u2019s value-added tax rate \u2014 which last week led to the budget being delayed to March 12 after political backlash \u2014 would also have presented a shock.<\/p>\n\n\n\n
But what it would have meant for monetary policy would have depended on the impact it had on inflation expectations or other so-called second-round effects.<\/p>\n\n\n\n
\u201cMonetary policy responds to those second round effects not to the shock,\u201d he said. The SARB\u2019s next meeting will conclude on March 20.<\/p>\n","protected":false},"excerpt":{"rendered":"
Reserve Bank governor Lesetja Kganyago says that South Africa faces shocks when it comes to both global and local policies.<\/p>\n","protected":false},"author":59,"featured_media":646203,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[7185,21832,2924],"class_list":["post-813983","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-g20","tag-lesetja-kganaygo","tag-reserve-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/813983","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=813983"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/813983\/revisions"}],"predecessor-version":[{"id":813985,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/813983\/revisions\/813985"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/646203"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=813983"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=813983"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=813983"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}