The SARB should lower and not raise the repo rate tomorrow
17 November 2021
The Congress of South African Trade Unions (COSATU) is waiting with keen interest the outcomes of the South African Reserve Bank’s Monetary Policy Committee meeting on Thursday 18 November.
The economy is on its knees, it is battling its deepest recession in a century, and an unemployment rate that is at an all-time high of 44% and rising. There are thousands of companies that are likely to close amid high levels of indebtedness amongst workers in both the public and private sectors.
The economy simply cannot afford a repo rate hike by the SARB. Inflation is well within the SARB’s 3% to 6% range at 4.2%.
What is needed now is to ease the pressure on workers, their families, SMMEs and the economy. A repo rate cut of 25 basis points will help workers pay their debts, families to afford food, and companies to avoid retrenchments. It will inject stimulus into the economy and send a positive message to investors.
The Federation hopes that the SARB will show that it is in tune with the plight of workers and has an appreciation of the need to stimulate a stagnant economy. A repo rate hike will be confirmation of a Reserve Bank which does not care about the plight of workers and is oblivious to the economic devastation South Africa is battling to overcome.
The recent decisions by the South African Reserve Bank on interest rates have only served to confirm the fact that the Bank and National Treasury are not interested in an alignment of the macroeconomic policies, in particular the alignment of the monetary policy with the industrial policy and other objectives.
Issued by Sizwe Pamla, National Spokesperson, COSATU, 17 November 2021