The African National Congress (ANC), Congress of SA Trade Unions (Cosatu) and other political parties have welcomed the decision by the South African Reserve Bank to keep the repo rate unchanged saying it will ease pressure on consumers.
ANC national spokesperson Mahlengi Bhengu-Motsiri said they noted that food inflation dropped, which will contribute to the reduction of the cost of living.
Cosatu said the decision of SARB will provide a reprieve for workers who have been battling high prices.
It said that over the last year-and-a-half the SARB has hiked interest rates, which has severely affected many people.
But now the latest report on keeping the repo rate will give breathing space to many workers who have struggled over the last few months.
Cosatu said on Thursday the inflation rate was now within the target range of the SARB.
SARB Governor Lesetja Kganyago has in the past said they want to keep the inflation rate between 3%-6%.
Bhengu-Motsiri said the ANC believes that the Reserve Bank’s decision came at the right time, and this will cushion many consumers.
“The ANC welcomes the decision of the Reserve Bank to leave the repo rate unchanged. We also noted that food inflation has substantially dropped from 10% in July to 8.2% in August. This is a strong indicator that the efforts to ensure that we see a reduction in the rising costs of living are beginning to bear tangible outcomes,” said Bhengu-Motsiri.
“We are also aware that external environmental risk factors, such as the price of crude oil, present a real inflation risk, and we are closely tracking the assessed impact in our internal modelling estimates,” she said.
Mmusi Maimane’s One Build South Africa (Bosa) said the SARB should have reduced the report rate by 25 basis points to relieve many households that have been struggling to survive for months.
It said that in anticipation of more troubles ahead for consumers, a lower repo rate would have protected consumers against increases in fuel prices and the expected VAT increase.
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