The cost of living has reached unprecedented levels, with many South Africans feeling the financial drain more than ever. Photo: File
Cape Town – The Public Servants Association (PSA) says the Reserve Bank’s decision to increase the interest rate by 75 basis points, taking the repo rate and prime lending rate to 5.5% and 9% respectively, has put citizens at risk of losing their assets such as cars and houses.
The cost of living has reached unprecedented levels, with many South Africans feeling the financial drain more than ever.
The PSA said it was extremely disappointed by the decision.
“This is the fifth consecutive interest rate hike since November 2021, which is speedily taking the prime rate back to a massive 10% such as before the Covid-19 pandemic.
“These increases disregarded the tough economic conditions with citizens barely coping owing to soaring prices of fuel, electricity, food, and public transport.
“Failure to arrest these chronic increases will result in consumers defaulting on debt repayment and losing their assets such as cars and houses.
“The increase will have a ripple effect on people’s ability to pay for basic services like electricity, thus impacting on municipalities’ ability to render services owing to decreasing revenue,” the PSA said.
Reserve Bank governor, Lesetja Kganyago, last Thursday raised the benchmark repo rate by 75 basis points to 5.50 percent per year.
This after the Monetary Policy Committee’s (MPC) interest rate-raising cycle started in November 2021, after it saw a period of lowering the rate during the pandemic.
“Public service employees, including those at state entities such as SARS and SITA, are bound to be affected as their uncaring employers are offering salary increases of between 0% and 2%,” the PSA added.
“Public servants have not received a salary increase for the last three years. These employees’ income is diminishing, and affordability of basic necessities is becoming a challenge, which is why these ridiculous salary-increase offers are rejected. The latest increase comes whilst people are still trying to recover from the devastation of the pandemic, which not only caused massive unemployment but also saw workers not receiving salary increases.”
Cape Times