Economists point out that both government bets are practically “dead”.
“The negotiation with the Fund is practically dead, it would have to be revived and the issuance of the volcano bonds is another issue that is complicating the president,” said the former president of the Central Reserve Bank, Carlos Acevedo.
The economist mentioned, for example, the occasions in which the government has postponed the issuance of Bitcoin Bonds, which would indicate that “there is no interest” among investors.
“First they said that in January, then in March, then they said that the Digital Assets Law was not ready, then that pensions were a priority, now the issue of security; I believe that the government has realized that there is not enough interest in the markets to acquire this issue”, Acevedo pointed out.
Likewise, the economist Luis Membreño indicated that given the entire situation, it will be difficult for the government to place the $1,000 million in Bitcoin Bonds.
“I think it will cost you a lot; Opinions such as that of Michael Saylor, knowledgeable on the subject, have been very clear in saying that the market is not prepared to assimilate bonds in Bitcoin, so it seems to me that the placement of these bonds is dead”, agreed Membreño.
Risk of default in El Salvador doubled in the last seven months
El Salvador, without a doubt, is not in a favorable condition, since it must be taken into account that according to the JP Morgan Emerging Markets Bond Indicator (EMBI) the risk of default, according to data as of April 14, was in 20 points, which means that the financial situation is critical and could default on its debt, a situation that generates distrust in creditors.
Last March, the Minister of Finance, Alejandro Zelaya, said that the bonds were not issued as planned (in the middle of that month) because there were no “favorable conditions.”
In the opinion of the economists, the official has not been specific, both regarding the placement of the Bitcoin Bonds and regarding the negotiation with the International Monetary Fund (IMF) to access a credit for $1,300 million.
“No one believes the Minister of Finance anymore, he has said so many things that have not happened, that he is no longer a reliable source of information; therefore, I think the trend is that there will be no chance of Bitcoin Bonds and I think the moment passed the previous year”, said Membreño.
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Acevedo said that the fall in the value of the crypto asset does not play in favor of the placement of the $1 billion debt either.
“In the last six months, bitcoin has fallen about 35% and that does not help to generate a favorable climate for the placement of these bonds; although the Minister of Finance said that if the volcano bonds were not placed between now and September, then it was not a very favorable time to do so, which is not so true”, Acevedo considered.
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