The Executive Board of the International Monetary Fund(IMF) has approved South Africa’s request for emergency financial assistance of US$ 4.287 Billion.
These funds, disbursed under the Rapid Financing Instrument (RFI), will meet South Africa’s urgent balance of payment (BOP) needs, arising from effects of the COVID-19 pandemic.
South Africa economy is suffering from high unemployment, poverty, and income inequality.
Like in other emerging economies, financial market volatility has increased during the pandemic.
“South Africa’s economy has been severely hit by the COVID-19 crisis, reporting the highest number of cases in sub-Saharan Africa,” said Geoffrey Okamoto, First Deputy Managing Director and Acting Chair, IMF.
The Country plans to reprioritize budget appropriations toward health and mitigation spending and devote additional budgetary outlays to protect the poor, the unemployed, and the most affected businesses.
The South African Reserve Bank (SARB) lowered the policy rate, ensuring adequate liquidity conditions in the financial system.