Amid the grand theater of international finance, El Salvador and the International Monetary Fund (IMF) have finally agreed on the first review of the country’s 40-month Extended Fund Facility (EFF) arrangement. 🎉
The agreement, pending the IMF’s Executive Board’s approval and the implementation of agreed-upon conditions, is a testament to the country’s unwavering commitment to fiscal discipline and, of course, a bit of Bitcoin mischief. 🤑
IMF officials Rodrigo Cubeddu and Luis Torres, in a joint statement, praised El Salvador’s early performance under the program. The country has met key fiscal and reserve targets, advancing governance and financial resilience reforms with a flair that only a nation with a penchant for digital currencies can muster. 🚀
“The authorities have made significant progress in implementing their economic reform plan under the IMF-supported program. Most program targets set for the first review were comfortably met, and implementation of the structural benchmarks is progressing well,” said the officials, with a hint of bemusement.
They noted that the nation’s economy continued to expand, buoyed by investor confidence and resilient remittance inflows. However, they emphasized the importance of maintaining momentum on fiscal consolidation and structural changes to address macroeconomic imbalances and support sustainable growth. 📈
Under the deal, El Salvador will continue its fiscal tightening measures, including cuts to the public wage bill, restrained current spending, and upcoming civil service and pension system updates. The government also plans to increase deposits at the country’s central bank to boost external reserves, all while keeping a watchful eye on the Bitcoin horizon. 🕵️♂️
Despite the progress, the IMF reiterated its concerns about El Salvador’s Bitcoin strategy. It stated that efforts were being made to ensure the government does not add to its BTC holdings, a task that seems as challenging as herding cats. 🐱🚀
“On Bitcoin, efforts will continue to ensure that the total amount of Bitcoin held across all government-owned wallets remains unchanged,” the statement read, with a touch of exasperation.
Steps are underway to phase out public sector involvement in the Chivo wallet by the end of July, a move that has been met with mixed reactions from the crypto community. 🤷♂️
In December 2024, the two parties struck a $1.4 billion deal that included conditions to limit the nation’s crypto-related activities. The deal required BTC’s acceptance in El Salvador’s private sector to remain voluntary and restricted public sector involvement in related transactions. 🤝
These conditions were later integrated into national policy through amendments to the Bitcoin Law approved by El Salvador’s Congress. The IMF Executive Board then approved the financing deal in February 2025, allowing an initial disbursement of $120 million, subject to approval. 💰
Despite the required limitations on crypto engagement, El Salvador’s Bitcoin Office has continued its strategy of buying one BTC per day. As of May 28, 2025, the country holds approximately 6,190 BTC, valued at around $675 million. President Nayib Bukele has also publicly stated that cryptocurrency remains a central part of his vision for the nation, a vision that seems to be as ambitious as it is unpredictable. 🌠
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2025-05-29 07:05