The Congress of SA Trade Unions was "deeply disappointed" that the Monetary Policy Committee of the Reserve Bank had only reduced the repo rate by "a mere 50 basis points," the federation said on Thursday.

"They have missed a great opportunity to make a substantial cut in interest rates, which could have helped to counter the massive danger of retrenchments and an economic slump in the wake of the world economic meltdown," Cosatu said.

Such a small reduction would have a minimal impact on individuals battling to repay loans and bonds, or on businesses struggling against the combined effects of the ten previous interest rate increases and the impact of the world economic crisis.

"The 0.5 percent cut will do next to nothing to save the thousands of jobs which are now under threat.

"The Governor [Tito Mboweni] is still wedded to his irrational attachment to the policy of rigid inflation-targeting, regardless of the fact that the rate of inflation is now falling, and that the biggest challenge, now more than ever, is economic recession and rising unemployment," Cosatu said.

The union federation said it was all the more astonishing that Mboweni took the decision at a time when governments around the world have slashed interest rates.

Cosatu repeated its demand for "an interest-rate strategy based on targeting economic growth, job creation and poverty eradication."

Without such a change, together with the other developmental policies in the Polokwane resolutions and the Alliance economic summit, there would be "a catastrophic recession, thousands more lost jobs and millions more sucked into a life of poverty and hopelessness," Cosatu said.