U.S. Trade Policies Could Affect Interest Rates, South African Banker Says.
The head of South Africa's central bank said some of Donald Trump's plans might cause problems. Trump was sworn in as president yesterday and wants to impose big taxes on goods from Mexico and Canada.
Lesetja Kganyago is worried that this could raise prices. Central banks have worked hard to keep prices under control, but they might have to stop lowering interest rates if inflation gets worse again.
"It could slow down the progress central banks made since the big inflation of 2022," Mr. Kganyago said. He was interviewed at an important meeting in Davos.
Many central banks, including those in the U.S., Europe, and South Africa, cut rates last year when prices started to level off.
The South African central bank dropped its key rate to 7.75 percent in November, its second small cut in a row. Experts think the bank will cut a little more at its next meeting on January 30.
But Mr. Kganyago said the U.S. plans add a lot of uncertainty. It is hard to know for sure what will happen with interest rates going forward, and there are many "moving parts" that could change things.
The head of South Africa's central bank said some of Donald Trump's plans might cause problems. Trump was sworn in as president yesterday and wants to impose big taxes on goods from Mexico and Canada.
Lesetja Kganyago is worried that this could raise prices. Central banks have worked hard to keep prices under control, but they might have to stop lowering interest rates if inflation gets worse again.
"It could slow down the progress central banks made since the big inflation of 2022," Mr. Kganyago said. He was interviewed at an important meeting in Davos.
Many central banks, including those in the U.S., Europe, and South Africa, cut rates last year when prices started to level off.
The South African central bank dropped its key rate to 7.75 percent in November, its second small cut in a row. Experts think the bank will cut a little more at its next meeting on January 30.
But Mr. Kganyago said the U.S. plans add a lot of uncertainty. It is hard to know for sure what will happen with interest rates going forward, and there are many "moving parts" that could change things.
