As the South African Reserve Bank’s Monetary Policy Committee (MPC) meets on Thursday (29 May), trade unions are intensifying pressure on the bank to implement a significant interest rate cut, warning that persistently high rates are crippling both workers and the broader economy.
The country’s repo rate currently stands at 7.5%, unchanged since the March MPC meeting, following three consecutive 25-basis-point cuts. The prime lending rate for commercial banks remains at 11%.
The Congress of South African Trade Unions (COSATU) is calling for a 50-basis-point reduction, citing falling inflation and the unsustainable financial strain on households.
“Despite the R44 billion unlocked through pension reforms, most workers are still buried in debt,” said COSATU Parliamentary Coordinator Matthew Parks.
“A rate cut would offer much-needed relief to families and help revive an economy that’s been stumbling along at 1% growth for more than a decade.”
Parks noted that inflation has declined to levels well within the SARB’s target range, arguing that the central bank has the fiscal space to ease pressure on struggling consumers.
“We cannot afford to continue suffocating an economy where growth projections for 2025 have already been revised down from 1.9% to 1.4%, thanks to global trade instability,” he added.
The General Industries Workers Union of South Africa (GIWUSA) echoed COSATU’s sentiments, with union president Mametlwe Sebei describing the current interest rate as “a brutal attack on the economy and jobs.”
“Workers cannot wait, nor can they afford the cost of living any longer,” Sebei said.
“The Reserve Bank’s excuses for maintaining such high rates have collapsed along with inflation, manufacturing, and employment in key sectors where jobs are being lost on an industrial scale.”
VOC News
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