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El Salvador Paid its $800 Million Debt Without IMF

The Central American country paid the investors holding the Eurobond with a maturity date of 24 January 2023.

Salvadoran flag
El Salvador Paid its $800 Million Debt Without IMF (Pic by audreym on Flickr)

President Nayib Bukele announced that El Salvador made the $800 million payment to sovereign debt bond creditors.

In Short

  • The country owed $800m in Eurobonds due today.

  • Bukele slammed those encouraging disinformation campaigns.


El Salvador's president, Nayib Bukele, reported yesterday that his country paid off an external bond amounting to $800 million and did so despite concerns that the government would default due to its "bet on bitcoin (BTC)."

The Central American nation completed transfers of the funds with which it paid investors holding the Eurobond due today, 24 January 2023. Finance minister Alejandro Zelaya assured that the payment was made and explained that "El Salvador fulfilled" thanks to the debt repurchase operations made in the last quarter of 2022. In fact, due to the anticipated operations, it was a reduced amount, so El Salvador paid $604 million in principal and $23 million in interest.


"In the last year, almost all the international legacy media said that, because of our bitcoin bet, we would default on our debt in January 2023. Well, we just paid $800 million plus interest in full," Nayib Bukele


The former government of Francisco Flores acquired The $800 million debt maturing today. Flores governed from 1999 to 2004. Mounting debt increased by $800 million and, with a term until 2025, was acquired during the presidency of Mauricio Funes (2009-2014).



Bukele questions Bitcoin critics

In June last year, renowned economist Steve Hanke used data from Visual Capitalist to claim that President Nayib Bukele's bitcoin bet placed El Salvador in the number one position of countries with the highest probability of defaulting on its debt.


At that time, Hanke pointed out that the country would not meet its commitments because the reserves it stores in bitcoin had depreciated by more than 50% due to its falling price. In other words, its investment in the cryptocurrency was negative, with an unrealized loss of more than $51 million. In September, Fitch downgraded El Salvador's credit rating to CC (very high levels of credit risk), describing a debt default as likely.

Everyone said that without reaching an agreement with the International Monetary Fund, we would not be able to pay our 2023 bond due to our Bitcoin losses. All this created the narrative that El Salvador was bankrupt. They lie and lie, and when they are exposed, they go into silence mode. Nayib Bukele, president of El Salvador.


Last year, El Salvador launched an offer to buy back its external debt to counter criticism that the country would default on its commitments. Despite the criticism, Bukele's government continues to expand El Salvador's bitcoin holdings, so much so that last November, it said it would start buying 1 BTC per day. And according to the site that tracks the country's total holdings, the Central American nation currently owns some 2,516 BTC worth $57 million.



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