The Congress of South African Trade Unions calls on the Reserve Bank of South Africa to cut the repo rate and provide badly needed relief to the economy when its Monetary Policy Committee meets on Thursday 21 January.
The economy is facing its worst recession in one hundred years with 6 million jobs last year. All of the government’s economic and social relief measures have effectively come to an end. Some of them, in fact, were more mirage than reality.
Commercial Banks’ limited three months payment deferrals, with interest accumulating, were nothing but a charade.
Inflation long been the sole point of obsession for the SARB, has been on a continuous downward trajectory and is currently at a stable 3.5%, and projected to remain there. The Rand has been appreciating.
All properly adjusted economic thinkers have agreed the SARB has more than enough room to further slash the repo rate. The SARB, despite its previous well-earned record of incredulous intransigence, did well in 2020 to provide meaningful relief to millions of struggling workers and consumers and hundreds of thousands of companies by cutting the repo rate.
With all other forms of economic and social relief measures having been abandoned by our mandarins in Pretoria, cutting the repo rate remains one of our few tools to ease the burden that many workers and families are carrying and stimulate economic growth.
Other countries have aggressively slashed their repo rates as a key tool to provide relief and stimulate growth.
We acknowledge that price stability is important for the economy as long as we currently depend on capitalists for job-creation and growth. As workers, we favour an approach that incorporates both the developmental imperatives and also protects the currency. These are mutually reinforcing rather than contradictory.
COSATU hopes that the SARB shows the necessary testicular fortitude and cuts the repo rate by at least 50 basis points when it meets this week. Failure to do so would sabotage any chance of an economic recovery this year.
Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson)
Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794