South Africa has received the $1 billion emergency loan that it requested from the New Development Bank.
This loan is to help fight the devastating effect of the coronavirus pandemic according to National Treasury.
The lenders serves as the BRICS nations – Brazil, Russia, India, China and South Africa – means the country will get the bulk of funds borrowed from international finance institutions by the end of this week.
SA is also expected to receive the $4.3 billion facility granted by the International Monetary Fund on Wednesday.
The treasury also said the R5 billion approved by the African Development Bank, is expected in August.
The AfDB loan will be paid in rands and the dollar-denominated loans from the NDB and IMF will be converted to rands by the Reserve Bank to finance the government’s local-currency commitments, Treasury said.
The borrowings are expected to increase the government’s foreign cash balances and debt, Treasury said.
However, the central bank confirmed that it will receive the borrowed money on the government’s behalf but, it would not say how the conversions will be handled.
“The South African Reserve Bank does not preannounce its operations in the foreign-exchange market,” it said.
SA is relying on the $7 billion from multilateral lenders and development finance institutions to boost the country’s economy pulled down by the pandemic.
The country also plans to seek $2 billion from the World Bank, according to Treasury Director-General Dondo Mogajane.