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Tuesday, 25 October 2022 01:11

IMF director indicates that an economic agreement with El Salvador is far from being signed

Written by Evelyn Alas
IMF director indicates that an economic agreement with El Salvador is far from being signed

The Western Hemisphere director of the International Monetary Fund (IMF), Ilan Goldfajn, told Bloomberg that a financing agreement with El Salvador is far from being approved.

In addition, Goldfajn indicated to the international media that there are fiscal aspects, governance, and Bitcoin as legal tender, which are "quite challenging issues at the moment", and are affecting the closing of an agreement.

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El Salvador and the IMF confirmed the negotiation of a financing program of up to US$1.3 billion in march 2021 and it was expected to be ready in the first half of that year.

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However, the process was delayed when the Legislative Assembly, with a pro-government majority, dismissed the magistrates of the Constitutional Chamber and the Attorney General.

The last setback was caused by Bitcoin, a digital asset that on september 7, 2021 entered as legal tender in the country, and which has been strongly questioned by the international entity.

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In a report published at the beginning of the year, the IMF pointed out that increasing public debt to invest in Bitcoin and synchronizing with the market to acquire the cryptocurrency, was not "a permanent solution to ease financial constraints".

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