El Salvador claims $800m bond paid

El Salvador has successfully repaid one of two outstanding $800 million bonds, according to the country’s Treasury Minister, Alejandro Zelaya. This news comes as a relief to investors who were worried that the government could default on its debt following its decision to make bitcoin legal tender. Zelaya announced the repayment of the bond on Monday night via a tweet, stating “El Salvador meets its debt obligations.”

While one bond has been paid off, the government still owes $367 million plus interest on a bond maturing in January 2025. The decision to make bitcoin legal tender has caused concern among investors and financial institutions, with the International Monetary Fund requesting the government to reverse its decision last year. Despite this, the government has invested more than $106 million in bitcoin.

In an effort to secure funding, El Salvador recently reached a deal with the Central American Bank for Economic Integration for a $350 million loan. It is not yet clear if this loan helped the government pay off the bond. The loan is intended to “strengthen the administration of government revenues and expenses through measures to reduce the tax gap and increase tax collection, as well as reduce smuggling and tax evasion,” according to a statement from the bank.