The governor of South Africas central bank Lesetja Kganyago said in an interview that "Central banks do not take pleasure in just keeping interest rates higher but because inflation has been more persistent than we thought, we are going to have to keep policy rates higher," the Wall Street Journal (WSJ) reported.
South Africas rand has fallen 6% against the dollar over the past few months, Kganyago added, indicating that some central bankers want to see American inflation tamed.
Abdellatif Jouahri, the Moroccan central bank governor said declining inflation in the US would help Morocco control prices.
Strong US economic data, including Septembers blockbuster hiring report, helped send Treasury yields to 16-year highs as investors bet the Federal Reserve would keep interest rates elevated for longer.
"Its a burden on very-low-income countries with a lot of debt without a lot of fiscal space," Treasury Secretary Janet Yellen said in an interview. "These countries are already hurt by higher food prices, higher energy prices spillovers from Russias war against Ukraine," Yellen added.
The WSJ also touched on the jump in oil prices since the summer is also threatening to reignite inflation just as many global central banks thought they were at the end of policy-tightening cycles.
The WSJ said that the current events in the Middle East threatens to inject volatility back into energy markets, harking back to last years commodity chaos after Russias invasion of Ukraine.
"Geopolitical tensions are the real economic risks now and we are all aware of that," said French Finance Minister Bruno Le Maire. "Any escalation in the region would, of course, have a significant impact on global growth," Le Marie added.
The IMF is concerned that slowing global trade could mark a new era of deglobalization as nations orient economic policy toward national security rather than growth. Geopolitical conflicts such as Russias invasion of Ukraine and friction between the US and China have already upended supply chains.
The paper pointed out that supply disruptions not only slow growth but also have prompted investors to factor in more future risks from potential geopolitical shocks, helping drive up interest rates.
International Monetary Fund Managing Director Kristalina Georgieva warned of a "deepening divergence in economic fortunes" during a week of meetings of financial officials in Marrakesh, Morocco, held just a month after the country was devastated by earthquakes.
Total global trade is set to grow only 0.9% this year, the IMF expects, a sharp drop from 5.1% growth last year.
Source: Qatar News Agency