SA may look to Brics bank for money as COVID-19 batters economy

South Africa’s economic prospects couldn’t be worse as the rating agencies downgraded four of major banks amid stagnant growth and the COVID 19, following Moody’s decision to downgrade SA to junk status. Courtesy #DStv403

JOHANNESBURG - The country is in an economic crisis.

Ratings agency Fitch has pushed the country further into junk status.

It follows Moody's decision to move South Africa's credit rating to sub-investment grade.

This comes as the country battles the coronavirus pandemic.

READ: Government focused on economic growth despite downgrade: Mboweni

Deputy Finance Minister David Masondo says structural reforms will have to follow measures put in place to mitigate the economic impact of COVID-19.

“Government has been undertaking a number of interventions to cushion the people from the economic impact of this crisis we are facing. We have allocated money towards health, we also did tax referrals, the Reserve Bank on their own reduced the repo rate,” said Masondo.

“We are in the process now of finalising a document as National Treasury which we will present to Cabinet which will add to more measures,” he added.

Masondo said government is looking at all options “including getting money from the New Development Bank.”

He said R1-billion has been allocated for South Africa.

The New Development Bank is a bank established by the BRICS states -- which include Brazil, Russia, India, China and South Africa.

Masondo says SA will only approach the IMF for only health reasons.

“We will only approach them for health if we think we are not able to finance our fight against the COVID-19,” he said.