FEDUSA Agitated with SARB Repo Rate Increase

30 March 2023

The Federation of Unions of South Africa (FEDUSA) is deeply disappointed at yet another repo rate hike by the Monetary Policy Committee of the South African Reserve Bank (SARB) after it decided to raise increase the repurchase rate by 50 basis points to 7.75% per year, with effect from the 31 of March 2023.

FEDUSA expectation on the hike was 25 basis points and not 50 after the last hefty hike. The food price inflation is now expected to be 9.9% in 2023 (up from 7.3%) and 4.5% in 2024 (up from 4.4%). FEDUSA believes that hiking the interest rates is a burden on over-indebted South Africans.

The hikes are a big slap in the face of millions of workers, consumers and businesses trying to survive the high cost of living. The complete erosion of disposable income is totally disheartening and only adds insult to injury to both workers, businesses, and the poor, who continually battle daily to make ends meet.

FEDUSA would like to remind the Reserve Bank and the government that the increase of the interest rates does not mean that salaries or social grants of millions of South Africans will also increase. It should be a reminder that the unemployed are also affected by the hikes and they will be more vulnerable.

FEDUSA is also extremely concerned about the impact of the interest rate hikes on the sustainability of jobs, debt, and survival of Small Medium and Micro Enterprises (SMME’s). The hikes will only worsen the sad situation of many South Africans.

FEDUSA therefore calls for urgent intervention by the government into solving the country’s economic problems and provide South Africans with a sigh of relief.

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