South Africa Central Bank Deputy Defends Need for Independence

(Bloomberg) -- South African Reserve Bank Deputy Governor Daniel Mminele emphasized the need for monetary authorities around the world to have independence from political pressure.

"Central bank independence is absolutely sacrosanct in my view and there is ample evidence that independent central banks tend to be more successful,” Mminele said, in response to a question on U.S. President Donald Trump’s criticism of the Federal Reserve this week. He declined to specifically comment on Trump’s tweets about the Fed.

Mminele also warned on the risks of escalating trade tensions, which are already impacting emerging markets. The South African rand is down 7.6 percent so far this year.

"We have seen risk off scenarios, we’ve seen currencies coming under pressure, we’ve seen inflation pressures building and some of the central banks are already taking action to try and ward off these pressures," Mminele said in Buenos Aires at a meeting of G-20 finance ministers and central bank chiefs.

Trump’s latest additional tariff threat this week was unwelcome news to Mminele.

"The ratcheting up of the rhetoric does affect confidence, does create uncertainty and will already have influenced behavior even before the first shot was fired,” Mminele said. "In the long run, there are no winners from a trade war."

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