UASA Media Release: 21 September 2023
Statement by Abigail Moyo, spokesperson of the trade union UASA:
The Monetary Policy Committee (MPC) of the South African Reserve Bank’s (SARB) decision to keep the interest rate at 8.25% for a second consecutive is good news for consumers with home and other loans.
To the relief of most, the prime lending rate of commercial banks remains at 11.75%, giving consumers some financial break as loan or mortgage repayments won’t cost them more for the time being. Although the Consumer Price Index slightly increased for August, the current 4, 8% reading is still within the SARB’s target range of 3% – 6%.
Further good news is the SARB’s expectation for the economy to grow by 0.7% in 2023 (primarily due to better electricity production), more than double the SARB’s initial expectations of 0.3%.
The decision to hold interest rates steady will, for now, prevent further pain to already strained consumers – who also have to cope with load shedding, water supply disruptions, high levels of and increases in fuel and food prices, and relatively low or no salary increases in addition to the highest interest rates in more than a decade.
UASA encourages its members and all South Africans to use this opportunity wisely by saving any disposable income they accumulate during this period for the future, as we are not out of the woods yet. There is still a chance that the MPC will raise interest rates at its November meeting, as Governor Lesetja Kganyago emphasised that certain risks may cause the CPI rate to increase and downplay lesser risks, such as lower inflation expectations.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162.