CONCERNS have been raised over the announcement that the repo rate will remain unchanged, even after the news that inflation has gone down in Mzansi for two consecutive times.
On Thursday, 25 January, the South African Reserve Bank's Monetary Policy Committee (MPC) has kept the repo rate unchanged at 8,25%. The repo rate is currently at its highest in 14 years.
The recent repo rate is the fourth to be announced since May 2023 after the interest rate was increased 10 consecutive times. While some economist predicted an increase in the interest rate, some civil organisations and political parties expected for it to be decreased.
Reserve Bank governor Lesetja Kganyago said that the unanimous decision to keep the repo rate unchanged was based on the current rate level, consistency in the inflation outlook, and the necessity to address rising inflation expectations.
ALSO READ: Putco gets 300 blessings!
But the African Transformation Movement (ATM) expressed deep concern over MPC’s decision, despite encouraging signs of a slight dip in consumer prices for the second consecutive month in December 2023.
ATM national spokesman Zama Ntshona said the cost of borrowing in South Africa is expected to remain high, adversely affecting the already strained financial situation of ordinary citizens.
“The latest data from Statistics South Africa (StatsSA) reveals that the headline consumer price index (CPI) eased to 5,1% in December from 5,5% in November, marking the lowest reading in four months.
Ntshona said the MPC’s refusal to provide South Africans with a safety cushion by lowering the repo rate further aggravates concerns, especially in light of the recent Rand Manipulation scandal that the reserve bank has chosen not to address.
Saftu general secretary Zwelinzima Vavi said instead of a restrictive monetary policy, they insist on a solution that will not reduce workers’ income, but a solution that will create jobs.
