Trade unions and economists say the Reserve Bank’s latest interest rate hike will place further pressure on already stretched South African households.
South Africa’s decision to increase the repo rate by 25 basis points to 7% has sparked concern among labour groups, economists and financial analysts, many warning that the move could deepen financial strain on households already battling rising living costs and mounting debt.
The South African Reserve Bank raised the repo rate for the first time since May 2023, pushing the prime lending rate to 10.5% as inflation risks intensified following ongoing conflict in the Middle East and disruptions to global energy supply chains.
UASA spokesperson Abigail Moyo said the increase would have a direct impact on workers with home loans, vehicle finance and credit card debt.
“Sadly, the impact of the repo rate increase on consumers with various loans, such as home, vehicle(s), and credit cards, means new repayment amounts based on the announced increase,” said Moyo.
