Political parties welcome interest rates cuts with caution

While political parties have welcomed the relief that will be brought by the 25 basis points cut in the repo rate, they say more still needs to be done to stabilise inflation and reduce the rising cost of living.

This after the South African Reserve Bank (SARB) announced the repo rate cut last week.

Government has already welcomed the reduction of the repo rate.

But Parliamentarians seem to differ on certain aspects of the announcement.

The Economic Freedom Fighters (EFF) national spokesperson Leigh-Ann Mathys says the conservativism of the central bank is worrying.

“We reject the decision by the monetary policy of the South African Reserve Bank to reduce the repo rate by 25% base points to 25% per annum. While we welcomed the much-needed relief for the working class and the consumers, the extreme conservatism demonstrated by the reserve bank remains a great concern.”

“Our economy is in a deep crisis. Economic growth remains sluggish. It has failed to grow more than 2% in the past five years since Ramaphosa took office as the president,” explains Mathys.

But, other parties have welcomed the reduction in the repo rate.

The African Christian Democratic Party (ACDP)’s Steve Swart says, “The ACDP welcomes the decision to cut the repo rate by 25 basis points to 8% with the prime lending rate dropping to 11.5%. Whilst this reduction will not be too much, it singles an important point for high interest rates.”

Some say the subsequent drop in the prime lending rate is also a relief.

Inkatha Freedom Party (IFP) MP Nhlanhla Hadebe says the celebrations must come with caution.

“The IFP welcomes the significant reduction in the repo rate as it has been cut by 25 basis points to 8%. This means the people of South Africa will finally be able to experience the economic relief. However, we celebrate with caution as we know how unpredictable the global financial market can be.”

“The ultimate good news for us would be to see the stabilisation of the inflation as this will mean reduction in food [prices] for our people.”

Congress of South African Trade Unions (Cosatu) says the central bank made a correct decision.

Cosatu’s parliamentary coordinator, Matthew Parks says, “Cosatu welcomes the 25 basis points cut in the repo rate by the Reserve Bank. This is going to be a welcomed relief to millions of workers and their families at large. Workers have been really paying the price of rising costs of living. Workers have been indebted and suffering to pay their debt to take care of their families to provide for the most essentials.”

“Workers have gone through difficult periods even above the lower difficulties with four hundred seventy percent basis by the Reserve Bank for the over past five years making it very painful for workers to pay their debt.”

In a statement, Build One South Africa, also welcomed the reduced repo rate.

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