Reserve Bank ‘could have helped consumers’

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An interest rate cut would have given consumers buying power to revive the economy through spending.

The South African Reserve Bank’s decision to keep the repo rate unchanged may be a safe option in the current economic climate, but some economists believe the central bank missed an opportunity to aid consumers. Sarb governor Lesetja Kganyago announced yesterday the monetary policy committee decided to keep the interest rate at 6.5% due to the unstable local economy.

Sarb governor Lesetja Kganyago announced yesterday the monetary policy committee decided to keep the interest rate at 6.5% due to the unstable local economy. “We are very disappointed at the bank’s conservative hand. The cut would have given millions of South Africans stuck in debt a relief. Consumers would spend more and stimulate the economy, given the fact lack of consumer spending has been contributing to the economic crisis,” said Abrahams.

Trade union federation Cosatu spokesperson Sizwe Pamla said the bank failed to provide relief for millions of people and businesses stuck in debt. He said a decrease in the interest rate would have given many room to breathe and afford to pay their debts.

 

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