While the "small" 100 basis points rate cut was welcomed, it was a case of "too little too late", the Congress of South African Trade Unions (Cosatu) said on Thursday.

Earlier, South African Reserve Bank (SARB) Governor Tito Mboweni said the Monetary Policy Committee (MPC) had decided to cut the repo rate by 100 basis points with effect from May 4.

"The MPC of the Reserve Bank has still not grasped the seriousness of the world economic crisis and the impact that is now being felt in South Africa," Cosatu said, adding that thousands of jobs were in jeopardy.

"The Reserve Bank Governor, Tito Mboweni, has conceded that domestic output and growth are declining or negative.

"Yet he has once again missed a great opportunity to deliver a radical cut in interest rates of at least 200 basis points, which would ease the burden on struggling businesses, prevent retrenchments, promote new investment and give the economy a shot in the arm," Cosatu said in a statement.

It added it had previously pointed out that other countries had slashed their interest rates drastically.

"The UK's [rate] is currently 1,5% and Japan's a mere 0,1%... yet the SARB still maintains a high rate of 8,5%," the union federation said.

The MPC was still clinging to the notion that monetary policy had to be based primarily on inflation-targeting, despite the fact that the rate of inflation was going down.

"Of course Cosatu would not welcome rising inflation, which hits workers and the poor hard, but today the biggest worry is not inflation but economic recession and the developing job-loss bloodbath."

Cosatu repeated its demand for an interest-rate strategy based on targeting not only inflation but also economic growth, quality job creation and poverty eradication.

"This is totally in synch with the policies adopted by the ANC's Polokwane Conference, incorporated into the ANC election manifesto and now adopted by the government led by President-elect Jacob Zuma," Cosatu said.

"They are also the policies adopted by business and labour at a Presidential Joint Economic Working Group meeting in December 2008," it added.

Unless the Reserve Bank changed its policy, it could push South Africa into a disastrous economic recession, with thousands more losing jobs and millions more doomed to poverty and despair, Cosatu said.