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IMF approves $4.3 billion loan to support South Africa during Covid-19 pandemic

The International Monetary Fund has approved South Africa's request for urgent financial assistance.

(FILES) In this file photo taken on March 27, 2020 An exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. - The International Monetary Fund onJuly 27, 2020 said it had app

The Executive Board of International Monetary Fund has approved South Africa's request for financial assistance to combat the challenging situation of the Covid-19 pandemic and is prepared lend the African nation US$ 4.3 billion under the Rapid Financing Instrument (RFI).

South Africa has been economically struggling over the last decade with the situation worsening following the pandemic, which has resulted in an increasing unemployment rate as more people are losing their jobs on a daily basis in addition to the income equality and poverty the country was already suffering from.

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The IMF board approved South Africa's fund request due to the severe economic recession the country is experiencing as a result of a decline in domestic activity and disruptions in the global supply chain followed the pandemic outbreak.

A part of the IMF statement read: “The authorities responded swiftly to the crisis. The June Supplementary Budget Review presented to Parliament contains a plan to re-prioritize 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) took strong and timely action by lowering significantly the policy rate and ensuring adequate liquidity conditions in the financial system.