The Congress of South African Trade Unions (Cosatu) on Thursday condemned the South African Reserve Bank’s role in what it calls “overvaluing the rand”.
Cosatu said in a statement that the current overvaluation of the rand has begun to destroy jobs by making it easier to import and harder to export.
“At a time of over 30% unemployment, this adds to the heavy burdens already faced by our people.”
The union federation added that instead of taking into account the needs of the real economy, however, the Reserve Bank has said the rand is not overvalued, and argues that it must hold up interest rates in order to achieve an unrealistically low inflation target.
“For this reason, it is unwilling to reduce the interest rate. Yet high interest rates by world standards are a major reason for speculative inflows that keep the rand overvalued without improving productive investment.”
Cosatu said the Reserve Bank has once again showed its callousness toward working people and the poor.
“Far from seeking to support employment creation and rising equality, it has chosen a course that puts it on a collision course with the needs of the majority of our people.
“Only financial interests and travellers to foreign countries gain from this policy. In contrast, counties that have industrialised have kept their currencies relatively low for long periods of time.”
Cosatu said it would raise this issue at Nedlac and at the Growth and Development Summit. – I-Net Bridge