After credit rating agency Moody’s downgraded South Africa to sub-investment grade, the country’s finance minister says that he wants international finance institutions to help fund a coronavirus bailout.
The downgrade makes it more expensive for the South African government to borrow money on the market, IOL reports.
The credit rating downgrade is expected to cost the South African economy around $5 billion.
South African finance minister Tito Mboweni says that he would approach the International Monetary Fund and the World Bank “about any facility that we can access for health purposes” if the country runs out of funds to fight the coronavirus, according to EWN.
The Washington D.C.-based IMF monitors the financial and economic policies of its member governments around the world. Of the 189 IMF members, 54 are in Africa.
The World Bank, also based in Washington D.C., is an international financial institution that provides loans to countries for capital projects, according to its website.
Its 189 member countries fund the bank which makes decisions on how to use the funding to reduce poverty and build shared prosperity in its member countries.
The downgrade to sub-investment grade or junk status puts additional pressure on the South African economy at a time when the COVID-19 virus is a priority, officials say.
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South African citizens are on a 21-day lockdown that is expected to end on April 17. The measure was imposed by the government to prevent the spread of the coronavirus.
There are 1,462 confirmed cases in South Africa at present, with five deaths confirmed as a result of COVID-19.