The decision by the South African Reserve Bank is a reminder that it is an undemocratic, opaque, and unaccountable institution that serves the needs of the tiny elite
18 November 2021
The Congress of South African Trade Unions (COSATU) is disappointed by the South African Reserve Bank’s decision to increase the repo rate by 25 basis points in the face of a sluggish economy.
This is a cruel slap in the face to millions of workers, consumers and businesses that are struggling to survive. This increase is going to suffocate the economy further at a time when the National Treasury has failed to provide any fiscal stimulus.
This decision is seriously jeopardizing the prospect of achieving even the modest targets on economic growth set by government in the Medium-Term Budget Policy Statement last week.
The reserve bank’s monetary policy is a critical instrument for development and the reserve bank should align its policy to broader macro-economic policy objectives that by far outweigh the inflation targeting.
Its mandate cannot just be limited, only, to keeping inflation under control, but it also needs to focus on supporting economic growth and job creation too.
This is another reminder that the Reserve Bank is oblivious to the needs of the real economy but is obsessed with massaging the interests of lenders and bondholders
The South African Reserve Bank’s inflation targeting monetary policy framework has been in place for over two decades with very little success.
This shows that this obsession with maintaining the low levels of inflation, to the exclusion of other important economic variables such as employment generation, investment and poverty reduction is driven by ideology and not by results. Sadly, this dogmatism has left millions of South Africans living lives of brute survival.
Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson)
Tel: 011 339 4911
Cell: 060 975 6794