SAFTU to protest outside the central bank offices in Pretoria

By Neo Poho

Ahead of the announcement of the interest rate hike, the South African Federation of Trade Unions (SAFTU) will protest outside the central bank offices on Thursday the 25th of May 2023.

SAFTU general secretary Zwelinzima Vavi alluded that the union strongly opposes the use of interest rates as a method of inflation targeting.

"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," Vavi said.

The South African Reserve Bank is expected to increase the country’s repo rate, two months after the reserve bank's governor Lesetja Kganyago, announced the repo rate hike of 50 basis points.

While the repo rate was hiked by 25 basis points to 7.25% in January, the union also stated that the hiking of interest rates resulted in the overwhelming working class, who have more financial liabilities and will end up paying more to service their debt.

“Small businesses are also devastated by interest rate hikes and they are also unable to keep up with rising costs of servicing their loans and credit facilities, moreover small businesses absorb these increased costs through pricing of their products.

So in the intermediate period, interest rates are therefore inflationary but in the longer term, they default, go bankrupt and retrench their workers,” Vavi added.

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