MEDIA RELEASE
2026-01-30
SUMMARY: The Labour Party of South Africa (Labour Party) has condemned the SARB’s decision to keep the repo rate at 6,75%, warning that a 10,25% prime lending rate is still suffocating working-class communities amid rising unemployment and a deepening cost-of-living crisis.
Yesterday (29 January 2026) the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) announced its decision not to cut the repo rate, which remains at 6,75%. This means that the lending rate remains alarmingly high at 10,25%.
The decision was not unanimous, with four members of the MPC voting to hold the rate and two voting in favour of a 25 basis point cut.
MPC of SARB periodically reviews and adjusts the country’s interest rate target to balance inflation control and economic growth. Last year, the inflation target was changed to a range between 3% and 6% by the first quarter of 2027.
Any changes to the target, whether in the form of increases, decreases, or holds, are informed by factors such as inflation trends, employment levels, consumer spending, and broader economic conditions. Adjusting the interest rate influences borrowing costs, lending rates, and overall liquidity in the economy, with the aim of maintaining price stability while supporting sustainable economic activity.
“The MPC’s decision must be shaped by realities and needs of South Africa, they must be reminded of the harsh reality facing the majority of South Africans. We do not have a growing economy or stabilising unemployment – in fact, many would argue that conditions are worsening”, said Joseph Mathunjwa, Interim President of the Labour Party.
It was reported by IOL that approximately 25 000 jobs were lost last year, deepening South Africa’s unemployment crisis, which continues to disproportionately affect Black SouthAfricans, women, and young people. More alarmingly, youth unemployment sits at over 40%.
Some commentators have noted that South Africa is in desperate need of decisive and swift intervention that will bring down the cost of debt, free up disposable income, and stimulate investment and economic growth.
“This decision systematically perpetuates the cycle of people borrowing money without knowing how they will repay it. For some, it even forces them into unsafe and exploitative lending alternatives. This shows a government that is comfortable with a dependent and poor South Africa” , argued Mathunjwa.
The Labour Party is fully alive to what it describes as a capitalist interest-protection agenda pursued at the expense of ordinary South Africans – an agenda which the Labour Party vehemently condemns and rejects.
This concern is shared by economists who warn that marginal economic growth is insufficient to drive meaningful job creation or strengthen household incomes.
“The truth is that these numbers mean very little to the millions of South Africans who remain trapped in unemployment, poverty, and inequality” , noted Mathunjwa.
This reality demonstrates that the purchasing power of South Africans is steadily declining. “The cost of living is extremely high and is creating a vicious cycle of debt, depression, and crime” , he added.
“This is clear proof of the Labour Party’s earlier warning that this new inflation target of 3% is just a way to protect the old money, and keep interest rates higher for longer”, said
Mathunjwa. “For some reason, our current government and the banks think that we won’t notice if they keep on squeezing us for every last cent. We see what they are doing, and we will keep on pointing them for it”, he warned.
The Labour Party firmly believes that government must do far more to empower and support South Africans. As such, the Party maintains that fundamental economic reformis urgently required – informed by a political reset that establishes a federal system of governance.
Under such a system, there would be a publicly owned Federal Reserve Bank that champions transparency and public accountability, and ensures that profits serve South Africa and South Africans first.
“South Africans need an interest rate cut. South Africa is already suffocating under heavy taxes, a high cost of living, and the unreliable delivery of basic services”, Mathunjwa concluded.
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