Media Alert 06 - 07 - 06

COSATU condemns interest-rate hike
COSATU is shocked by the increase in interest rates announced today by the Reserve Bank. This decision will cause direct harm to working people and the poor, above all by further slowing economic growth and employment creation.

The higher interest rates take place when:

1. Inflation remains far below the top of the targeted range.

2. Growth remains slow by international standards, even if it is higher than it was in the 1990s.

3. South Africa has already attracted far too much in the way of short-run, speculative investment from overseas, adding to overall economic instability and pushing up the value of the current at the cost of growth in industry.

Unemployment remains far above international norms. Today, one in three South African workers who wants paid work cannot find it, and two out of three Africans under the age of 30.

In these circumstances, COSATU wholeheartedly condemns the decision to raise interest rates. The Reserve Bank is supposed to serve our people. Instead, it has become a harsh master, contributed to continued joblessness and poverty.

We will be seeking an urgent meeting with the Governor to engage with him on this burning issue and will consider how we can respond to this decision through our on-going Jobs and Poverty Campaign.