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Covid-19 Relief Measures – Reserve Bank Buys More Government Bonds

The Reserve bank of South Africa have purchased an additional R5 billion government bonds during June as part of Covid-19 relief measures it has undertaken to inject liquidity into markets.

It had previously purchased about R10 Billion worth of government bond in May and R11.4 billion government bonds in April.

Its total bond holdings have risen to R35.89 bill

These efforts have seen bond yields easing, although the bank does not target yields specifically.

Other interventions include lowering interest rates by 275 basis points, said to provide relief to indebted households and businesses, adjusting capital requirements for banks and partnering with National treasury and commercial banks to support small and medium enterprise with a R200 billion loan guarantee scheme. So far commercial banks have extended over R10.6 billion to over 7 400 distressed businesses as part of the scheme.

In addition, banks have approved more than R30.6 billion in relief to individuals and businesses affected by the Covid-19 pandemic and national lockdown, according to the Banking Association of South Africa. Its statistics show that R18.26 billion in relief had been extended to individual customers and R12.39 billion had been extended to small and medium enterprises.

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Written by Ph

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