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The Federation of Unions of South Africa (FEDUSA) welcomes the announcement by the South African Reserve Bank's Monetary Policy Committee (MPC) to decrease the repo rate by 25 basis points. While we understand the MPC's mandate to maintain price stability, FEDUSA would have preferred a greater cut of the repo rate to bring much-needed relief to cash-strapped workers who have endured multiple rate increases.

This decrease comes after Stats SA announced that consumer inflation decreased for the third consecutive month, to 4.4% in August, down from 4.6% in July. This marks the lowest inflation rate since April 2021, which also stood at 4.4%.

The 25-basis point cut will have a positive effect on workers and households already burdened by the high cost of living and affordability. While we acknowledge the steady decrease in fuel prices and consumer inflation, we cannot overlook the country's expensive cost of living. The positive impact overall for workers and businesses alike, by spurning cyclical economic activity, is what should inspire the Governor and the MPC to be more aggressive in the next round of meetings, taking cognizance of the strength of the rand and the falling oil prices over the last few months.

FEDUSA calls on the MPC to consider the broader economic and social consequences of its decisions. We urge the committee to prioritize the needs of ordinary South Africans, who are already facing the rising cost of living and unemployment.

A balanced approach is needed without being overly focused on the inflation target range, as the aspirations of a developmental state must not be forgotten. The MPC should look into alternative measures to address inflation, such as increasing public investment and promoting economic growth for the betterment of the country.

FEDUSA remains committed to advocating for the interests of workers, and the wider community, and we will continue to engage with the government and other stakeholders to find solutions to the challenges currently facing our country.

Issued by FEDUSA