But what does this do for inequality? The reflex answer is that, in South Africa, there are both rich and poor people, and the poor borrow from the rich, so higher interest rates increase inequality while lower rates, or looser policy, reduce it. But this is misleading. South Africans in every income bracket tend to have a lot of debt.
The National Credit Regulator reports that there were a bit more than 25 million ‘credit active’ people in South Africa at the end of last year, which compares with around 16 million people who have some sort of employment. 6  These decile figures are used by Statistics South Africa for the consumer price index. See http://www.statssa.gov.za/publications/P0141/P0141April2018.pdf, p. 10.