June 4, 2009 / 11:37 AM / 11 years ago

UPDATE 1-S.African union group backs strike call on rates

* COSATU backs metalworkers’ strike call over interest rates

* No date set for any possible strike action

* Union won’t support contract renewal for c.bank governor

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By Pakama Ngceni and Alison Raymond

JOHANNESBURG, June 4 (Reuters) - South Africa’s labour federation COSATU, an ally of the ruling ANC, on Thursday backed a call by metal workers for strikes to demand deeper interest rate cuts to help lift growth and save jobs.

The National Union of Metalworkers of South Africa (NUMSA), an affiliate of COSATU, on Monday threatened mass strikes to press for steeper rate reductions because recession is forcing companies to scale down operations in Africa’s biggest economy.

“We fully endorse that we must engage in mass action,” COSATU General Secretary Zwelinzima Vavi told reporters.

The unions have not set any date for possible strike action.

The central bank’s monetary policy committee cut the key repo rate by 100 basis points last week, adding to 350 basis points worth of cuts in a monetary loosening cycle that began in December last year.

COSATU had demanded a 200 basis point cut at last week’s policy meeting.

The metalworkers’ union, which says it has more than 260,000 members and is one of the country’s three biggest, staged a protest at the Reserve Bank prior to the rates decision, and criticised Governor Tito Mboweni’s refusal to accept a petition.

On Thursday, COSATU said it would not support the renewal of Mboweni’s contract, which expires in August.

Mboweni is widely respected by markets for making monetary policy more transparent and for efforts to keep inflation in check, which saw the central bank hike interest rates by 500 basis points over a 2-year period to June 2008.

“We wont be supporting Tito’s contract renewal later this year. We need change there at the Reserve Bank,” said COSATU President S’Dumo Dlamini. (Writing by Stella Mapenzauswa; Editing by Matthew Tostevin)

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