This news aggregator site highlights South African labour news from a wide range of internet and print sources. Each posting has a synopsis of the source article, together with a link or reference to the original. Postings cover the range of labour related matters from industrial relations to generalist human resources.
Business Report writes that SA Reserve Bank (SARB) Governor Lesetja Kganyago has left public opinion divided over his remarks about the impact of rising interest rates on unemployed people.
Speaking at the PSG Think Big Series last week, Kganyago said that high interest rates, which the SARB has been raising to curb inflation, did not affect unemployed people because they did not qualify to raise debt. He was responding to a member of the audience, who challenged the SARB’s continuous monetary policy tightening as that which was grounded in First World thinking and did not take into account the country’s prevailing economic conditions. In his response, Kganyago defended the bank’s restrictive monetary policy stance, saying that inflation-targeting was the best available mechanism to help the poor as it gradually slowed down the increasing prices of goods. “The unemployed that you talk about, nobody lends them money. They are unemployed. So the interest rates don’t even enter the equation for them,” Kganyago said. His views have polarised opinion in public discussions on social media, with some saying he was detached from reality and seemed to not understand the transmission mechanism of rate hikes. Some pointed to the 2020 research report by the Black Sash and the London School of Economics, which revealed that beneficiaries of social grants have become a lucrative market for formal lenders who charged them exorbitant interest. However, in the view of Momentum Investments economist Sanisha Packirisamy: “The governor is correct in saying that the direct impact of a higher interest rate environment on lower-income households is negligible given that lower-income earners have very little exposure to prime-linked debt.”
- Read the full original of the report in the above regard by Siphelele Dludla at Business Report
Get other news reports at the SA Labour News home page