There is "significant slowdown" in the South African economy, Reserve Bank Governor Tito Mboweni said on Wednesday.

Speaking at a Rotary Club dinner in Cape Town, Mboweni said this did not mean the local economy was going into recession.

"There is a possibility that we might have two consecutive quarters of negative growth," he said.

Mboweni said the South African banking centre was in good shape, while its US, UK and European counterparts were not.

"No banks have come to the central banks to ask for special liquidity provision."

He said the central bank remained focused on the six to three percent inflation targets. He noted however, that there could be "a slight deterioration in the inflation picture before it returns to the target range".

On the way forward, Mboweni noted there would be a need to "clean up" the banking system. There was also a need to improve on the supervision and the regulations of the world's financial systems.

It would further be necessary to ensure that global organisations such as the International Monetary Fund and the World Bank did not forget about developing countries.

Referring to the local economy, he said it was important people "don't get into a state of depression".

Sapa

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