COSATU condemns the Reserve Bank’s decision to increase the interest-rates
22 November 2018
COSATU is shocked by the Reserve Bank’s monetary committee decision to increase the repo rate by 25 basis point to 6.75%. This decision will cause direct harm to working people and the poor, above all by further slowing economic growth and employment creation.
The motivation to increase the interest rates does not make economic sense. Firstly, inflation at 5.1% is well within SARB’s inflation target range of 3% to 6%. Secondly, inflation is likely to drop in December with the anticipated significant drop of approximately 10% in the fuel price. Thirdly, how does squeezing struggling workers and businesses of their last few Rands and cents help grow the economy out of the devastating recession?
The federation condemns this decision because it means that the Cost of Debt or credit is going to go up and all those who have housing bonds or any debt for that matter can now expect to pay more unless their bonds/loans are on a fixed interest rate.
The Reserve Bank is supposed to serve our people but instead, it has become a harsh master and its decisions continue to contribute to joblessness and worsening poverty. Unemployment remains far above international norms and today, one in three South African workers who wants paid work cannot find it, and two out of three Africans under the age of 30 are unemployed.