Lesetja Kganyago, governor of South Africa's Reserve Bank. Photographer: Simon Dawson/Bloomberg
The South African Federation of Trade Unions (Saftu) has welcomed a decision by the SA Reserve Bank (SARB) to keep interest rates unchanged.
SARB’s Monetary Policy Committee did not hike the interest rates.
They left the repurchase (repo) rate at 8.25% and the prime lending rate at 11.75%.
The announcement from the Reserve Bank governor was met with a sigh of relief from many consumers and home and vehicle owners.
‘’Saftu is opposed to using interest rates as tools to fight inflation. As we have explained previously, interest rate hikes are inhumane, with dire consequences for the living standards of ordinary workers, creating unemployment, pushing small business traders out of business, and dampening the productive sectors of the economy as a whole,” the federation said.
They said they found the mechanisms used by the SARB to control inflation as problematic,
“That interest rates are inhumane is not a statement we thumb suck, but the SARB and the Governor, Lesetja Kganyago, have admitted and proudly say they are pursuing, albeit in a more technical language. In answers to questions from journalists today, Governor Kganyago said they are committed to a restrictive monetary policy. Restrictive monetary policy means instituting interest rates to the level that they reduce money in circulation, choke aggregate demand and stimulate,” Saftu said.
This year, interest rate increases has been one of the main contributors to money stress, along with running out of money before month-end, unexpected expenses, inflation and living costs, the impact of load shedding, school fees and retirement.
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