The Trust Project builds transparency standards across news companies.
El Salvador has claimed that it has sufficient funds to pay off its obligations before they become due, breaking the global trend of deteriorating socioeconomic circumstances.
As 2023 approaches, analysts are debating El Salvador’s plans to service an $800 million bond maturity. In an unexpected turn of events, the country’s president, Nayib Bukele, has allayed fears by announcing a repayment scheme.
Bukele said on Twitter that his administration had brought two measures to the legislative chamber to ratify his intention to voluntarily acquire national debt bonds with maturities between 2023 and 2025.
According to the country’s finance minister, the large repurchase is partially backed by IMF and Central American Bank for Economic Integration (BCIE) reserves.
“Contrary to what the media has said all along, El Salvador has sufficient cash not just to fulfil all of its obligations when they are due but also to purchase all of its debt (until 2025) in advance,” Bukele stated.
El Salvador will purchase back at market value
Following the parliamentary chamber’s confirmation of the scheme, Bukele said that the nation would pay the bond market price. He noted that the process would begin in six months, and the stock price might instantly increase when the repurchase starts.
According to research by Citi Research, the total cost might exceed $1.7 billion. The statement cautions that the unanticipated repurchase carries significant risks, such as the price increase of short-term bonds.
Bukele concluded his statement by expressing his hope that the media would pay attention to the move in the same manner that they “published hundreds of pieces claiming that we are on the verge of default.”
Bukele’s ratings increase
In a recent Gallup survey measuring the performance of Latin American presidents, Bukele received the highest rating of 89 percent. His professional management of the economy after the pandemic year and his assault on gang activity boosted his popularity.
Under Bukele’s leadership, El Salvador became the first nation to recognise Bitcoin as legal cash, despite divided opinions over the viability of the action.
Also Read: Bankrupt Crypto Lender Celsius Gets Help From Former CFO
Wallets