The International Monetary Fund (IMF) has approved SA’s request for financial support under the Rapid Financing Instrument (RFI) for an amount of US$4.3 billion.
This is to help the country mitigate the adverse social and economic impact of the Covid-19 pandemic.
National Treasury, the additional IMF funding is a low interest loan that contributes to government’s fiscal relief package while respecting South Africa’s decisions on how best to provide relief to the economy and those worst affected by the current crisis.
“It will also pave the way for government to provide the necessary financial relief required to forge a new economy and mitigate further harm to the economy.
“South Africa has been hard hit by the pandemic, and this required government to come up with fiscal and monetary measures that would respond to the struggling economy and contain its negative effects to society,” said National Treasury
Treasury director-general Dondo Mogajane said earlier this year that Treasury was looking to raise R95bn from multilateral institutions and development banks.
The funds would reportedly go towards business support, job creation and protection of existing jobs in the current economic climate.
Finance Minister Tito Mboweni said government’s Covid-19 economic support package directs R500 billion straight at the problem.
“This is one of the largest economic response packages in the developing world.
“The South African Reserve Bank has reduced interest rates and made it easier for banks to lend money, and supported liquidity in the domestic bond market.”