UASA Media Release: 19 September 2024
Picture Source: South African Reserve Bank (SARB).
Statement by Abigail Moyo, spokesperson of the trade union UASA:
UASA welcomes today’s long-awaited repo rate cut – the first in more than four years – by the South African Reserve Bank’s (SARB’s) Monetary Policy Committee (MPC).
Following yesterday’s Consumer Price Index (CPI) announcement stating that inflation fell below the SARB’s 4,5% target range, the 25-basis point cut in the repo rate to 8% is a welcome relief for most workers and consumers. The prime lending rate will now be 11,50%.
Given the current outlook, the repo rate will likely drop again in November by at least 25 basis points. The CPI outlook has also brightened as inflation expectations decreased to 4.8% for 2025 and 2026 from above 5%. Consequently, South African consumers can look forward to further interest rate reductions in the New Year.
Although depositors will receive a lower income from interest-related investments, borrowing costs will decrease and provide relief to consumers, especially those with high levels of debt.
The governor of the SARB, Lesetja Kganyago, warned that many upside risks to the CPI still exist and that the MPC will remain data-dependent at future MPC meetings.
This cut will make borrowing more attractive for individuals and businesses alike, encourage consumer spending and hopefully set us on the track of economic recovery. At the very least the cut will ease the financial stress of workers in these difficult times.
The next MPC meeting is on 21 November.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162.