The Public Servants Association (PSA) has made a call to the Monetary Policy Committee (MPC) at the Reserve Bank to take firm action through considering to reduce interest rates in upcoming meetings.
According to the PSA, its appeal is based on recent observations by economists. It was stated that the undue financial burden could cause constraints to South Africans. This more especially on public servants.
PSA general manager Reuben Maleka said: “Some economists emphasised that South Africans are bearing the brunt of inflated bond payments. Also increased debt-servicing costs. The PSA believes that these high interest rates are unjustifiable and detrimental to the financial well-being of citizens. South Africans are facing numerous financial challenges. These are exacerbated by the economic strain of the Covid-19 pandemic.”
Overall economic recovery of South Africa
Maleka emphasised that the Monetary Policy Committee should consider a reduction in interest rates. This to alleviate the financial pressure on citizens.
“Recent interest rate hikes, which were not imperative, resulted in an inequitable financial situation. Lowering interest rates will assist in stabilising the financial security of workers. It will contribute significantly to the overall economic recovery of South Africa,” he said.
He added that public servants play a crucial role in the functioning of society. Hence PSA is calling for the reduction of interest rates.
“It is essential to ensure that public servants are not unduly burdened by excessive financial costs. Especially when such measures are avoidable. The PSA believes that a reduction in interest rates is needed to provide much-needed relief to public servants. And to all South Africans facing financial strain,” said Maleka.
The organisation also urged the MPC to consider various matters when making its decision with regard with interest rates.
Economic recovery, relief for workers
“Economic recovery will be supported as lowering interest rates will encourage spending and investment, stimulating economic growth and aiding the country’s recovery from the effects of the Covid-19 pandemic.
“A reduction in interest rates will provide immediate financial relief to workers and other South Africans, lessening the burden of high debt-servicing costs and making mortgages more affordable,” he said.
Prioritise the financial security and well-being of citizens
PSA also urged the MPC to consider a reduction in interest rates without risking inflationary pressures. It said this will lead to increased business activity. Jobs will be created, and this will bring stability to South Africans.
“It is time for the MPC to act in the best interests of the country and its citizens. The PSA trusts that the MPC will consider the Union’s appeal and reduce interest rates. Its is time to prioritise the financial security and well-being of South Africans,” said Maleka.
