The Inkatha Freedom Party has expressed its concern about the announcement of the South African Reserve Bank of a further increase of 1% in the Repo Rate.

The IFP has suggested a separation of short term rates and long term rates. IFP spokesperson on Finance, Hennie Bekker MP has expressed his disappointment about the 1% increase so soon after the increase in January.

Most of the banking institutions and building societies have already followed the guidance of the Reserve Bank.

Bekker said in his speech in the budget debate, that the IFP can understand the reasoning behind the raising of the Repo rate, in the light of the Zimbabwean situation and the devaluation of the Rand.

What the IFP however can't understand is why in the process South Africa must also punish the long term lenders and particularly borrowers with mortgage bonds.

"You at the same time brush with the same paint, the unruly speculators as well as the hard pressed home owners," Bekker said.

Hennie Bekker said that it is possible to differentiate between long term interest rates and the short to medium factors.

If it is not possible for Government to administratively separate these borrowing categories then government can subsidise long-term housing by the equivalent of the relevant rate increase.

"What entrepreneurs and homeowners now need is good news not bad news. South Africa needs a higher growth rate and with higher interest rates, we are working right against growth" Bekker said.