DA welcomes Reserve Bank decision to cut interest rates

The Democratic Alliance (DA) is encouraged by the South African Reserve Bank's (SARB) decision to cut interest rates by 100 basis points. Despite immense pressure from businesses feeling the strain of the global economic crisis and the governing party's tripartite partners, the SARB has been consistent in taking a disciplined, independent and considered approach in targeting inflation. Inflation places tremendous pain on the poorest of the poor and those on fixed incomes as it eats away at their purchasing power.

Recent data suggests that inflation has peaked and that we can look forward to further rates cuts later in the year. The government must use today's interest rate decision as an opportunity to consult with banks in order to ensure that credit lines are free to flow down to the end consumer. The motor industry, the housing market and business investment are critical components of our economy and are currently struggling because of the lack of available credit.   The interest rate decrease will act to stimulate demand and provide welcome relief to consumers in this economic downturn; but we also need credit to be extended appropriately in order to get our economy moving again.  

Statement issued by Kobus Marais, MP, Democratic Alliance spokesperson on finance, February 5 2009