Saftu fears ‘stubbornly high’ inflation could lead to more rate hikes
The South African Federation of Trade Unions (Saftu) says the latest consumer inflation number will be used as a pretext for another repo rate hike.
As noted the inflation rate remains high above seven percent and averaged seven-point-two percent in December 2022.
Stats SA released the latest data on Wednesday, saying inflation for December came in at 7.2%.
While the softer inflation is good news for most consumers, it remains above the Reserve Bank’s target range of between 3 – 6%.
"The SARB and its army of commentators, all neoliberal monetarists, are using a painful way of hiking interest rate hikes to fight inflation,” says Saftu spokesperson Trevor Shaku.
“Because of their belief that ‘inflation is everywhere and always a monetary phenomenon’, to fight inflation, they always strive to reduce the money in the pockets of consumers who are overwhelmingly working class people.
"This is done by making financial liabilities such as loans, bonds and credit facilities expensive through interest rate hikes. This method drains money out of people’s pockets, and simultaneously pushes small businesses into bankruptcy, which in turn stimulates unemployment."
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