Today, the International Monetary Fund (IMF) Executive Board approved a $1.4 billion financing program for El Salvador, providing immediate economic support to the country; it includes an initial disbursement of $113 million.
According to the IMF, the program aims to enhance El Salvador’s economic resilience by strengthening public finances, rebuilding financial buffers, and improving governance and transparency.
Additionally, it will address risks associated with Bitcoin, which the country adopted as legal tender in 2021.
The financing program is part of the Extended Fund Facility Agreement (EFA) and will span 40 months.
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The IMF expects the agreement to unlock further multilateral financial support, potentially leading to a total financing package exceeding $3.5 billion over the program period.
Following the approval, Nigel Clarke, IMF’s Deputy Director General, and Acting President, highlighted El Salvador’s steady economic growth, supported by strong remittances, increased tourism, and improved security.
Clarke also noted that the country has seen a reduction in external deficits and inflation, while recent debt management efforts have eased short-term financing needs.
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The IMF’s financial backing is seen as a significant step toward stabilizing El Salvador’s macroeconomic outlook and fostering long-term economic growth.
The financial assistance is expected to provide the country with the necessary resources to navigate fiscal challenges while maintaining economic stability.
