MEDIA RELEASE
2025-10-19
SUMMARY: The Labour Party of South Africa (Labour Party) has condemned the Reserve Bank’s decision to keep the repo rate unchanged. The Party argues that the decision serves the ruling elite at the expense of working people who are crushed by debt, low wages and spiralling living costs.
Yesterday (18 September 2025), the Monetary Policy Committee (MPC) of the South African Reserve Bank announced its decision to retain the current repo rate at 7%. This comes after the US Federal Reserve reduced its interest rate by 25 basis points to 4,25% on Tuesday, and many analysts predicted a 25 to 50 basis point cut for South Africa.
“As the Labour Party, a party with the interest of the working class at heart, we are extremely disappointed that the Reserve Bank did not use this opportunity to address the low growth rate and shocking unemployment rates in our country”, said interim Labour Party President Joseph Mathunjwa.
In January this year, the repo rate was cut by 25 basis points, while in March it was left as is, followed by two consecutive cuts in May and July. With the inflation rate easing from 3,5% in July to 3,3% in August, a cut in September appeared warranted. This expectation was reflected by the split vote at the MPC meeting, whereby two (2) members voted in favour of the cut and four (4) for holding the interest rate at 7%.
“It is clear whose interests this Reserve Bank is serving”, said Mathunjwa. “They are there only to protect the interests of the ruling elite – those who have the capital, at the expense of the working class who are forced to borrow in order to survive in these economic conditions”, he said. “If you are a low to middle-income person in this country – as in most of the world – you can simply not go without some form of debt – even if it is just for your house or your car”, he added.The current inflation rate, measured as the Consumer Price Index (CPI) is the lowest that
it has been since the sitting State President took office. In 2017 it was 5,3%, peaking at 7% in 2022, dropping to its current 3,3% in August this year.
In July this year, the SARB announced an interesting shift in its inflation targeting approach, opting to focus on the lower end of the then 3%–6% target range to a singular target rate of 3%. This means that, coming from a high inflation context in 2022, where the interest rates remained high, the policy was changed without addressing the legacy issues.
“This is totally unfair”, said Mathunjwa. “They raised our rates when inflation was high but then, as the inflation comes down, they refuse to bring the interest rate down again and rather choose to conveniently change their policy”, he said. “It is clear that this is intended to punish consumers twice – first at the collective bargaining table, when salary increases are negotiated, and then again at the bank, when they need to pay off their loans”, he said.
Typically, wage negotiations base their landing points on the CPI rate – meaning that a low inflation environment, generally results in lower wage increases. Lower wage increases, coupled with higher interest rates tend to place a greater burden on consumers.
On the recent release of the second quarter statistics on the Gross Domestic Product(GDP) ‘growth’ , Mathunjwa said: “The truth is that these numbers mean very little to the millions of South Africans who remain trapped in unemployment, poverty, and inequality”.
These concerns are shared by several analysts and economists who state that the current economic environment is not enough to boost job creation and strengthen household incomes. It is clear and obvious that the purchasing power of South Africans is in fact decreasing.
“The cost of living is extremely high, and is creating a vicious cycle of debt, depression and crime” , stated Mathunjwa. “Unfortunately, we cannot be misguided to look at these trends and statistics in isolation. The so-called favourable trends of a decreasing inflation rate and interest rate must correspond to the upliftment of South Africans and so must the statistics”, he explained.
“We can simply not be content with the bare minimum when in fact our country is blessed with vast mineral and other resources that can bolster job creation and overall wellbeing” , Mathunjwa argued.
“As South Africans, we must rather call out the failures of this ANC and their lack of leadership and progressive policies”, he said.
The Labour Party is convinced that the government should be doing way more to empower and support South Africans, as such the Labour Party is adamant that there needs to be an economic reform in South Africa informed by a political reset which will establish a federal system of governance.
The Labour Party also advocates for a federal system of government. government there will be a Federal Reserve Bank which will be publicly owned which willIn a federal not only champion transparency and public accountability but will ensure that profits serve South Africa and South Africans. It will also have a broader mandate, that not only protects the interests of those who have lots of money by targeting inflation, but also target key socio-economic aspects like economic growth and optimal employment figures. With the Labour Party, it is possible!
“As the Labour Party, we demand that the SARB comes to its senses and cuts the repo rate by 50 basis points to make up for missed opportunities when it meets again”, Mathunjwa concluded.
The final MPC meeting of the year is scheduled for 20 November 2025.
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