(Bloomberg) — El Salvador’s exposure to cryptocurrencies — including Bitcoin — is minimal, according to the chairman of the Central American Bank for Economic Integration, which provided most of the funds that the country is expected to use to repay a bond next week.
Most Read from Bloomberg
“We have seen that exposure, and we consider it very small — it is a not significant one,” said Dante Mossi, executive president of the multilateral lender, which provided $450 million of loans earlier this month. “We are interested that investors also know the real situation of El Salvador.”
Uncertainty about the real exposure of El Salvador to Bitcoin, which has plummeted in value in recent months, has been among the factors weighing on the nation’s access to capital markets. President Nayib Bukele’s administration had purchased 2,381 Bitcoin through June 2022, according to his announcements on Twitter. On November 16, he said the government would buy one Bitcoin every day.
The International Monetary Fund is expected to carry out its so-called Article 4 mission — in which it provides a macroeconomic assessment and recommendations — for El Salvador, Mossi said. CABEI is working with El Salvador’s government to compile information on debt sustainability, which is expected to include disclosures on cryptocurrencies, for the IMF review.
Press officers at El Salvador’s Ministry of Finance didn’t immediately reply to a request for comment via email. The country’s $347.9 million of 5.875% bonds due in 2025 touched the highest price since November 2021 on Friday at 72.89 cents, according to Bloomberg prices.
The CABEI chief added that the covenants of the recently-provided financing bar El Salvador from using it to buy such assets.
“The use of proceeds will be audited in six months,” Mossi said.
–With assistance from Sydney Maki.
(Adds bond prices in 5th paragraph)
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.
