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Reserve Bank ‘should set up cheap loans to save firms’

Covid-19 4 months ago

The bank could provide low-interest loans to banks, which the banks could use to extend low-interest loans to distressed businesses, a finance expert said.


03 Apr 2020
PREMIUM!
Reserve Bank ‘should set up cheap loans to save firms’

The SA Reserve Bank.

The Covid-19 crisis is not only causing business interruptions and putting many small and medium-sized enterprises at risk of imminent collapse, it will also result in an enormous liquidity crisis which, in turn, will cause large-scale job losses. As a result, the government needed to ensure the SA Reserve Bank offered cheap loans to the banks, a finance expert said. Professor Philippe Burger of Free State University said that in SA and elsewhere, some larger corporations might have the financial reserves to serve as a cushion for a while, but others did not. “As a result, liquidity crises threaten to...

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