Some unions want SARB MPC to abandon restrictive monetary policy
SAFTU said lowering interest rates now would provide much-needed relief for businesses, workers and households struggling under excessive debt burdens.
FILE: South African Reserve Bank. Picture: supplied
JOHANNESBURG - Some labour unions want the South African Reserve Bank’s monetary policy committee (MPC) to abandon restrictive monetary policy as consumers hold their breath for the repo rate announcement on Thursday afternoon.
While inflation was unchanged at 3.2% in February and the print is expected to remain on the lower end of the reserve bank’s target band of 3% and 6% for 2025, there are some concerns that inflation expectations could increase over the next two years.
Higher value-added tax (VAT) and uncertainty around trade tariffs are among the factors adding to uncertainty about the future.
Some economists believe the reserve bank will keep the repo rate unchanged at 7.5%.
However, the South African Federation of Trade Unions (SAFTU) said keeping the repo rate higher for longer would continue to choke investment and restrict economic growth.
SAFTU said lowering interest rates now would provide much-needed relief for businesses, workers and households struggling under excessive debt burdens.
President of the General Industries Workers Union of South Africa (GIWUSA), Mametlwe Sebei said: "High borrowing costs starve productive sectors manufacturing, agriculture, infrastructure of credit, fuelling unemployment and deindustrialization."
The Congress of South African Trade Unions (COSATU) agreed, calling for at least a 25 basis point cut.