The Federation of Unions of South Africa (FEDUSA) is looking forward to the announcement by Governor of the Reserve Bank, Gill Marcus tomorrow on the repurchase rate. The Monetary Policy Committee will be making the announcement on 22 July and FEDUSA is hoping that the interest repurchase be cut by 100 basis points.
In a recent report by the Organised Labour, Business and Government with the Organisation for the Economic Co-operation and Development (OECD), a recommendation was made that there was scope for easing monetary policy and that South Africa was not being aggressive enough by international standards.
“As labour we do believe that in order to stimulate the economy even further we need to cut the repo rate by another 100 basis points to keep interest rate low. By reducing the repo rate struggling local companies are able to access credit at much lower rates and in turn allow their businesses to grow and create more employment. The domestic economic has not completely recovered and is still very fragile and would be reason enough to called for further monetary stimulation,”
In looking at the Real short-term interest rates index of the report by the OECD, it can be concluded that South Africa’s interest rate is at 6.5% while countries such as Brazil at 4%, while the United States of America and the United Kingdom is below 0%.
“There is no need for us to keep our interest rates so high, we have an objective and that to see that the economy is stimulated, that jobs can be created and in the process that we eradicate poverty,” says George.