Union federations have criticised the South African Reserve Bank following its decision to raise the repo rate by 25 basis points to 7%.
The increase pushes the prime lending rate to 10.5%, adding further pressure on consumers already grappling with high living costs.
The South African Federation of Trade Unions (SAFTU) described the Monetary Policy Committee’s decision as economically reckless and socially destructive.
SAFTU spokesperson Asive Dyani said the rate hike is disconnected from the realities faced by millions of South Africans battling unemployment, debt, and rising living costs.
“Millions of workers are drowning in home loan repayments, vehicle finance debt, personal loans, credit card debt, school fee debt, retail debt, and microloan debt. Every hike pushes families closer to default, repossession, blacklisting, and financial ruin,” Dyani said.
“At the same time, productive sectors of the economy are suffocating,” he added.
Meanwhile, the Congress of South African Trade Unions (COSATU) said the move will deepen the financial strain on workers and households already under severe economic pressure.
COSATU spokesperson Matthew Parks called for an end to further rate hikes and urged the government to extend fuel levy relief measures to help consumers cope.
“Working-class families have felt the pain of repeated taxi and bus fare increases, as well as above-inflation electricity tariff hikes. Most workers are drowning in debt and borrowing simply to buy food, electricity, and transport, while trying to service unaffordable debt levels,” Parks said.
He added that many employed South Africans are supporting extended families while spending a significant portion of their wages on transport costs.
VOC News
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