Friday, 29 May 2026: The South African Reserve Bank’s decision to hike the repo rate by 25 basis points to 7 per cent (pushing the prime lending rate to 10.5 per cent) is a blatant act of class warfare orchestrated on behalf of finance capital – the most parasitic and speculative fraction of monopoly capital. In a country already devastated by structural unemployment, grinding poverty, and world-leading inequality, this move prioritises the super-profits of banks, financiers, and rentier interests over the survival and dignity of the working class and the poor.

Finance capital, with its insatiable demand for high real interest rates and quick returns, has once again dictated SARB policy. While headline inflation hovers around 4 per cent – largely imported through global fuel prices, supply disruptions, and imperialist conflicts – the Bank chooses to crush domestic demand, investment, and job creation to defend the balance sheets of the big four banks and international finance. Even dissenting MPC voices acknowledged the limited efficacy against imported inflation, yet the hike went ahead. This exposes the capture of monetary policy by financial elites who thrive on high rates while the real economy bleeds.

With expanded unemployment at a catastrophic 43.7 per cent (youth unemployment over 60 per cent), and recent job losses exceeding 345,000 in one quarter, the SARB’s actions represent economic sabotage against the masses. Finance capital benefits from elevated returns on speculative assets and debt servicing, while workers face higher borrowing costs, evictions, repossessions, and business closures among small and township enterprises. This is not a neutral policy. It is the logic of finance-dominated capitalism: socialise losses onto the people, privatise gains for the banks and shareholders.

The specific assault by finance capital:

• Debt trap for workers: Already over-indebted working-class households will suffer even higher servicing costs, enriching commercial banks through wider spreads between repo and prime rates.
• Starved productive investment: High rates deter investment in manufacturing, infrastructure, agriculture, and industrialisation – sectors that could create decent work – while favouring financial speculation and portfolio flows.
• Deepened inequality: Financial asset owners (the rich and connected) are shielded and rewarded, while the unemployed and precarious workers sink further into despair.
• Monopoly power reinforced: The big banks and financial institutions tighten their stranglehold, extracting rents from a vulnerable economy instead of supporting national development.

The SACP has consistently warned that the current inflation-targeting framework serves finance capital and global neoliberalism, not the National Democratic Revolution. Unemployment and inequality are not side issues. They are the primary contradictions that a developmental monetary policy must confront head-on.

The SACP demands:

1. An immediate and fundamental overhaul of the monetary policy framework to subordinate it to employment creation, sustainable growth, radical redistribution, and the reduction of inequality – ending the dominance of finance capital.
2. Urgent and substantial repo rate cuts to slash the cost of capital and channel resources into productive, job-creating investment.
3. Aggressive regulation and reduction of the exploitative spread between the repo rate and prime lending rates charged by commercial banks, clawing back super-profits from finance capital.
4. Stronger coordination between the SARB, National Treasury, and productive sectors to drive state-led industrialisation, localisation, and a just transition that breaks the power of finance over the economy.
5. Massive expansion of public investment in infrastructure, education, healthcare, and worker-controlled programmes as part of advancing people’s power and the transition to socialism.

The working class did not defeat apartheid colonialism only to be subordinated to the dictatorship of finance capital in the democratic era. Today’s decision confirms the SACP’s analysis: the macroeconomic framework remains biased towards white monopoly capital and imperialist finance at the expense of the black working-class majority.

We call on Cosatu affiliates, progressive forces, and all patriots to escalate the struggle against the tyranny of finance capital. Only a radical economic transformation that places the commanding heights of the economy under democratic control can end this cycle of exploitation.

ISSUED BY THE SOUTH AFRICAN COMMUNIST PARTY,
FOUNDED IN 1921 AS THE COMMUNIST PARTY OF SOUTH AFRICA.
 
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