UASA welcomes the decision by the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) to keep interest rates on 3.5%, although we hoped for a cut against the background of the recently released second quarter GDP figures.
Stats SA announced last week that the South African economy contracted by 16.4% in Q2 2020 compared to Q1 2020.
The bank’s expectation of a 8.2% growth contraction is worrying, although it is lower than that of the Organisation of Economic Co-operation and Development (OEDC) whose projection is a contraction of 11.5%. These numbers show that the economy is in an even worse shape than estimated by both the government and Reserve Bank.
Salary cuts and retrenchments as a result of the lockdown have had a huge financial impact on millions of workers in South Africa and the unchanged repo rate will help them to get back on their feet or even top up their savings. It will further allow workers to spend more on goods and services thereby boosting the economy and helping to grow our GDP.
UASA urges its members manage their money wisely by settling debts or keep paying the same amount towards their home loans and other debt commitments as they did before the rate cuts, if at all possible.
The difficult times we now experiencing are far from over and the best action anyone can take now is to protect themselves as well as they can against financial distress by living frugally and spending wisely.
For further enquiries or to set up a personal interview, contact Stanford Mazhindu at 074 978 3415