El Salvador is reportedly close to securing a $1.3 billion loan program from the International Monetary Fund (IMF), according to the Financial Times.
This agreement, expected within the next two to three weeks, represents a critical step in re-establishing the country’s ties to the international financial system.
The IMF’s mission team has arrived in the Salvadoran capital, San Salvador, to finalize the details. If the agreement is approved by the IMF board, it will unlock additional financing of $1 billion from the World Bank and another $1 billion from the Inter-American Development Bank over several years. The IMF has not commented directly on the ongoing negotiations.
The proposed agreement marks a significant shift in El Salvador’s policies regarding its pioneering use of Bitcoin as legal tender, a law implemented in June 2021. Under the new terms, the Salvadoran government will no longer require businesses to accept Bitcoin as payment, making its use optional instead.
The IMF previously expressed concerns about Bitcoin’s adoption, citing risks to financial stability and integrity. However, the current agreement reflects a compromise as El Salvador also commits to reducing its fiscal deficit by 3.5 percentage points over three years. These measures include spending cuts, increased tax revenues, the introduction of an anti-corruption law, and steps to bolster foreign exchange reserves from $11 billion to $15 billion.
This loan package signals a potential return for El Salvador to the global financial arena after years of limited access to international lending. The IMF’s approval of this program would provide critical financial support for the country while balancing its bold cryptocurrency experiment with international fiscal requirements.
El Salvador is holding around 6,181 BTC and is currently buying 1 BTC daily. Its Bitcoin holdings are valued at approximately $560 million, purchased at an average price of $44,000 per BTC.
