UASA Media Release: 18 July 2024
Statement by Abigail Moyo, spokesperson of the trade union UASA:
As expected, the South African Reserve Bank’s (SARB’s) Monetary Policy Committee (MPC) announced that the repo rate will remain unchanged at 8.25% for the eighth consecutive time.
The repo rate is at a 15-year high, putting immense financial household expenditure pressure on workers who are property bondholders and who have other debts to pay. Businesses with bank loans will also be disappointed by the decision.
However, for the first time in a year, the decision was not anonymous, with four committee members in favour of holding the rate and two favouring a 25 basis point cut, which may point to better news when the committee sits again in September.
This will be welcome relief for the South African economy, especially South African consumers who have been under severe financial pressure for almost four years – first due to the COVID-19 pandemic and resultant lockdowns, followed by high consumer price inflation (CPI) and the rising interest rates.
The good news is that the inflation outlook is positive, and economists expect the repo rate to be 100 to 150 basis points lower by the middle of next year.
UASA encourages its members and fellow South Africans with home and other loans to tighten their belts to keep abreast of the current financial challenge. Higher prices, looming electricity increase should Eskom’s request for a tariff increase of 44% be approved, might not only dump the economy into a recession, but also contribute towards CPI converging back to 6% and halt any interest rate decreases.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162.