Saftu: Interest rate hike regressive & will further sabotage the economy

JOHANNESBURG – The South African Federation of Trade Unions (Saftu) has hit out at the reserve bank’s decision to hike interest rates, accusing the central bank of choking small businesses.

The bank hiked interest rates by 75 basis points in a bid to fight stubborn inflation.

Governor Lesetja Kganyago on Thursday announced the latest changes following deliberations with the Monetary Policy Committee.

Saftu spokesperson Trevor Shaku said that he did not believe that the decision was made in the best interests of the economy.

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“It is regressive and sabotages the economy further in the context of low growth,” Shaku said.

Shaku said that higher mortgage costs could drive small and medium businesses to default on payments.

“Even worse, he is pushing most of these workers out of work, since the small and medium enterprise workers will retrench workers when they go out of business due to defaults on their loan and credit facilities,” Shaku said.

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