El Salvador finance minister says possible IMF deal no panacea

El Salvador’s Finance Minister Alejandro Zelaya speaks throughout a information convention in San Salvador, El Salvador March 18, 2022. REUTERS/Jose Cabezas

SAN SALVADOR, July 14 (Reuters) – Salvadoran Finance Minister Alejandro Zelaya minimized on Thursday the potential optimistic influence of a long-delayed cope with the Worldwide Financial Fund, even because the extremely indebted nation stares down a doable medium-term default.

El Salvador introduced it was negotiating a doable $1.3 billion mortgage with the IMF in March 2021, geared toward filling gaps within the Central American nation’s finances and lowering excessive prices related to the nation’s debt, which in March surpassed $24 billion.

The deal’s future has regarded unsure since El Salvador rebuffed IMF requires the federal government to reverse its choice to make bitcoin authorized tender final September.

In his remarks on Thursday, Zelaya mentioned discussions with the IMF proceed however performed down the deal’s fiscal influence, which he mentioned would quantity to lower than 10% of the nationwide finances.

“You must put all these points into context, however we’re sustaining conversations and as soon as we’ve one thing concrete we’ll announce it.”

Analysts together with rankings company Moody’s say the deal would enhance El Salvador’s credibility and assist shore up its shaky funds. learn extra

“I’ve seen that some analysts consider that the cope with the IMF goes to fully enhance the well being of the nation’s public funds, and no, it’s one a part of our technique for enchancment,” Zelaya mentioned.

Reporting by Nelson Renteria; Writing by Brendan O’Boyle; Enhancing by Sandra Maler

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