The Citizen reports that according to trade union federation Cosatu, the SA Reserve Bank (SARB) is moving from being tolerably assertive to becoming overzealously reckless on interest rates.
This was indicated after the repo rate was increased on Thursday by 75 basis points, a day after it was announced that consumer inflation was at its highest since 2009. The latest hike – the steepest hike since 2002 – brings the repo rate up to 5.5% and the prime rate to 9%. It is expected to impact heavily on South Africans with debt. Cosatu spokesperson Sizwe Pamla said that, while they appreciated the need to keep inflation in check, which would have an impact on workers and repeal their wage increases, to continue to use the monetary policy to deal with high inflation was both “naïve and reckless”. “It’s going to depress the demand domestically when some of these issues aren’t necessarily the responsibility of National Treasury. So, for the Reserve Bank to continue to claim that it has tools in its tool kit to fix the inflation is a little bit naïve and reckless,” he commented. According to Pamla, National Treasury, working with other governments at a geopolitical level, could intervene in respect of the high cost of fuel and wheat prices due to Russia’s ongoing war in the Ukraine.
- Read the full original of the report in the above regard by Faizel Patel at The Citizen
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