Sept. 28 (Bloomberg) -- South African Reserve Bank Governor Gill Marcus said the global economy is in a “danger zone” and recent financial market turmoil indicates the world is close to another “Lehman-type” event.
The depreciation in emerging-market currencies represent an “overshoot” and it may ease as risk appetite improves, she said in an opinion article published in Johannesburg-based Financial Mail today. South Africa should increase trade with Africa, Asia and other emerging markets, such as Brazil and India, to help offset the impact of slower growth in Europe, Marcus said.
“Growth also needs a domestic focus and there is an urgent need to revive domestic investment,” as gross fixed capital formation remains below the peak reached before the 2008 global crisis, she said.
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