The central bank added another seventy-five basis points to the repo rate, bringing it up to 7%
Screengrab from video of Sarb Governor Lesetja Kganyago delivering the MPC statement on 24 November 2022
JOHANNESBURG – The South African Federation of Trade Unions (Saftu) said the South African Reserve Bank (Sarb) Monetary Policy Committee’s announcement of an interest rate hike on Thursday sought to punish already cash-strapped consumers.
The central bank added another seventy-five basis points to the repo rate, bringing it up to 7%.
This takes the prime lending rate for consumers to 10.5% – meaning homeowners and motorists will have to dig deeper into their pockets to cover the costs of their mortgages and car loans.
While the latest interest rate hike was expected Saftu laid into the Sarb governor – Lesetja Kganayago.
Saftu spokesperson, Trevor Shaku said the federation’s worried that the Sarb will still pile on the interest rate hikes that worsen consumers’ financial woes.
“By using interest rates, governor Kganyago is squeezing the consumers. In other words, he’s punishing the victims of inflation,” complained Shaku.
ECONOMISTS CRITICISE THE GOVERNMENT’S LACK OF POLITICAL WILL
Some economists have hit out at the government for what they say is a lack of political will to help curb the country’s runaway inflation.
High inflation and power cuts are still among the biggest factors adding to the increases.
Efficient Group Economist, Dawie Roodt said while he believes the reserve bank is justified in hiking rates, there were political interventions to consider.
Ha said wage increases for the public service and at Eskom were also putting the country in a tight position.
“We certainly cannot afford to give Eskom workers a 7% increase because Eskom is bankrupt. We also need to get between 10,000 to 20,000 people working at Eskom because there are too many people at Eskom. It is costing us too much money and that means that Eskom must increase electricity prices, or they simply will not survive financially,” said Roodt.