Cosatu slams state interest rates policy

The Reserve Bank's policy of raising interest rates has had a disastrous impact on South Africans, the Congress of SA Trade Unions said yesterday .

The Reserve Bank's policy of raising interest rates has had a disastrous impact on South Africans, the Congress of SA Trade Unions said yesterday .

Spokesman Patrick Craven said the union was urgently appealing to the governor, Tito Mboweni, and his Monetary Policy Committee not to impose any further increases in base lending rates.

An increase was expected to be decided on this week.

"Cosatu is convinced the policy of raising interest rates has had a disastrous impact.

"It has directly contributed to slowing down the rate of economic growth, job creation and poverty alleviation," he said.

The policy was also jeopardising government's Asgisa target of halving the 2004 levels of unemployment and poverty by 2014.

The manufacturing sector had been particularly hard pressed. The mining, wholesale, retail and hospitality sectors had also been affected, he said.

The government's inflation targeting policy was "based on the false belief that inflation and excessive consumer spending, rather than unemployment and poverty, are the major problems we face". - Sapa

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