Saftu pickets against repo rate hikes

Saftu pickets against repo rate hikes

Members of the South African Federation of Trade Unions (Saftu) were picketing at the South African Reserve Bank headquarters in Pretoria. 

Saftu Zwelinzima Vavi national shutdown 24 aug
Twitter: @SAFTU_media

The picket came ahead of the repo rate announcement on Thursday afternoon.

Reserve Bank governor Lesetja Kganyago is expected to announce the decision this afternoon, following the Monetary Policy Committee meeting this week.

The rate announcement comes a day after Statistics South Africa data showed consumer inflation eased to an 11-month low, with economists warning that the Reserve Bank is likely to raise the interest rates again, despite the overall drop in inflation.

However, Saftu general-secretary Zwelinzima Vavi said the federation is opposed to the use of interest rates as a way to target inflation. 

"Our country is ravaged by high unemployment and poverty, and any responsible central bank will not hike interest rates to induce a recession and unemployment. Such a policy path is not only unreasonable, but treasonous.

"This treasonous way of fighting interest rates has resulted in the transfer of wealth from the poor to the rich. The overwhelming working class, who have more financial liabilities; loans, credit card facilities, retail credit facilities than assets, will pay more in servicing their debt," said Vavi.

Vavi said a rate hike will also have a devastating impact on small businesses.

"In the intermediate period, interest rates are therefore inflationary. But in the longer term, they default, go bankrupt and retrench their workers."


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