El Salvador’s bond value skyrockets, after IMF announcement

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By LatAm Reports Staff Writers

The value of El Salvador’s bonds due in 2032 gained 1.4 cents to 86 cents, the highest level since mid-February this year, according to price indicative data compiled by the Bloomberg news agency. Bonds soared after the International Monetary Fund (IMF) announced that talks with Salvadoran authorities on a funding program are on track. 

IMF staff continue to work constructively with the Salvadoran authorities with the aim of reaching agreement on an IMF-backed program, said the entity’s spokeswoman, Julie Kozack, last Thursday. 

The IMF spokeswoman said that “the discussions focus on policies to strengthen fiscal and external sustainability and boost productivity growth and strengthen economic governance. Addressing the risks arising from Bitcoin is a key element of our discussions with the authorities.” 

Kozack acknowledged that in El Salvado “real GDP growth strengthened in 2023, driven by tourism and construction, and this happened thanks to solid remittances and a very improved security situation.” 

“Inflation fell, the current account deficit shrank, and this was supported in part by falling global commodity prices. With regard to fiscal policy, last year was somewhat accommodating, driven by increased spending on pensions and public investment, although efforts were made to contain current expenditure and regularize spending arrears.

This article has been translated from the original which first appeared in Diario El Mundo