The economy remains in a crisis despite small signs of improvement around the world, South African Reserve Bank (Sarb) Governor Gill Marcus warned on Tuesday.
Welcoming Monday’s appointment of Janet Yellen as the new US Federal Reserve chair, Marcus says she’s confident the American and global economies are in safe hands.
But she says this doesn’t mean the effects of the financial slump are over.
“Don’t forget, we may have come out of recession and there are different elements to the financial crisis, but we are not out of crisis.”
The governor says while some economies are improving, others are holding the rest of the world back.
“The UK is improving but Europe is not, so we are not out of the woods yet.”
Yellen will replace Ben Bernanke on 1 February.
The pair developed the policy of quantitative easing aimed at increasing the flow of capital in the US and by proxy, around the world.
But Yellen is widely expected strengthen the tapering process in the coming months as the US economy continues to improve.
This will mean a weakened capital flow to emerging markets such as South Africa, says Marcus.
The move will make growing the local economy a more difficult task.
But Marcus says it’s not all cause for concern.
“It does indicate that things are getting better and I think it’s good news for the world, even if it’s a difficult transition.”