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Thu May 26 06:43:55 SAST 2016

Cosatu deeply disappointed with ‘inconsiderate’ rate hike

TMG Digital | 28 January, 2016 18:46
“Cosatu is not shocked because the abstract decisions of this privately-owned bank are not based on economic reality that is experienced by most South Africans. File photo
Image by: JAMES OATWAY

The Congress of South African Trade Unions says it is deeply disappointed but not shocked by the “inconsiderate” decision by the South African Reserve Bank’s Monetary Policy Committee to increase the repo rate by 50 basis points.

It added that the decision would “squeeze and ultimately decimate” the “already bleeding working and middle classes”.

“Cosatu is not shocked because the abstract decisions of this privately-owned bank are not based on economic reality that is experienced by most South Africans.

“Workers are already hurting because their meagre salaries are not keeping up with escalating prices of energy‚ food‚ transport and electricity.

“The only ones to benefit from rake hikes are banks who will rake in even more money from the poor for their loan repayments‚” the trade federation asserted.

It added: “We reiterate our opposition to the South African Reserve Bank's continued use of inflation targeting policy as a flagship monetary policy framework. It is not working and exacerbates the problems faced by the poor in this country.

“This will further repeal their wages and will result in most of them struggling to repay their loans. Our members are amongst the most highly indebted workers because of poor wages as a result of the untransformed apartheid wage structure they are subjected to.”

The decision would not only punish working and middle class South Africans‚ who were already battling to make ends meet‚ but would also reduce expenditure and consumption‚ further stifling economic growth and job creation‚ Cosatu said.

“We reiterate our position that nothing good will happen‚ in this country‚ if the Reserve Bank is not nationalised.”

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