Thu Oct 27 16:47:04 SAST 2016

Cosatu calls for Marcus to 'dramatically drop' rates

By Zukile Majova | Nov 17, 2009 | COMMENTS [ 0 ]

AS RESERVE Bank governor Gill Marcus prepares to announce her decision on interest rates today following the two-day meeting of the monetary policy committee this week, labour federation Cosatu has concocted a new cocktail of demands.

The two million-strong trade union wants a "dramatic drop" in interest rates to save jobs and those companies placed in financial distress by the economic recession.

At the weekend, a three-day meeting of the tripartite alliance announced it wanted a review of the central bank's inflation targeting policy and proposed an extension of the bank's mandate to include the creation of jobs.

ANC general secretary Gwede Mantashe said the ANC, Cosatu, the SA Communist Party and the SA National Civics Organisation had resolved to review the bank's mandate.

"The summit agreed that the alliance task team on macro-economic policy must remain seized with reviewing and broadening the mandate of the Reserve Bank."

Cosatu spokesperson Patrick Craven said uncompromising inflation targeting had resulted in the economy shedding close to a million jobs this year, adding that "some of these jobs could have been saved".

Independent economist Mohau Pheko said the alliance had opted for the relaxation of the 6percent inflation target to stimulate job creation.

"South Africa would not be alone in taking this line of thinking because there are countries that have relaxed their inflation targets beyond 10percent to as far as 13percent.

Other analysts said the decision to "tweak" inflation targeting policies was more of a "compromise" by the President Jacob Zuma government than a policy shift to the left.


Login OR Join up TO COMMENT