The International Monetary Fund's executive board will meet next Monday to consider South Africa's request for a Covid-19 response loan, according to the board's calendar.
The meeting comes after months of engagements between National Treasury and IMF management. SA is seeking a loan of $4.2 billion from the multilateral institution, though certain factions of the ANC have been against this.
The IMF is known for issuing loans with stringent conditions related to structural reforms. However, the Covid-19 loan, which falls under the "rapid financing instrument" of the IMF, is not subject to these same conditions.
Finance Minister Tito Mboweni has said that the loan being sought will not "undermine" national sovereignty.
Mboweni said he also had the support from the ANC to approach the IMF. Treasury has been locked in "protracted" negotiations with IMF management to discuss the borrowing arrangements, Fin24 previously reported.
Monday's meeting is likely to be about the consideration of the term sheet for the agreed amount, said Sifiso Skenjana, chief economist at IQBusiness. The term sheet would include details of the transaction – such as when and how much must be repaid. It is country-specific and considers said country's economic trajectory, he explained.
"This is more of a rapid credit facility and ensuring all the boxes are ticked around the utiilisation of that facility," Skenjana said.
Government has put together a R800 billion response – a combination of fiscal and monetary policy interventions – in a bid to mitigate the impact of the Covid-19 pandemic.
* Correction: An earlier version of this article stated SA is seeking a loan of $4.2 million. The correct figure is $4.2 billion.
