- Bukele is also responsible for El Salvador’s Bitcoin purchasing binge.
- Global markets credit research, Fitch lowered El Salvador’s debt rating from CCC to CC.
El Salvador’s current president, Nayib Bukele, has reportedly declared his intention to run again in 2024. El Salvador was one of the nations whose highest court overturned a limit on successive presidential terms in September 2021. President Bukele stated in a speech on Thursday that, “developed countries have re-election, and thanks to the new configuration of the democratic institution of our country, now El Salvador will too.”
Bukele is a strong proponent of Bitcoin, and he spearheaded the effort in El Salvador to legalize the use of Bitcoin as money last year. El Salvador’s finance minister responded to criticism from the IMF and others by saying, “No international organisation is going to make us do anything, anything at all.”
Tough Times Ahead
Bukele is also responsible for El Salvador’s Bitcoin purchasing binge and the frequently delayed plans for a Bitcoin metropolis fueled by a volcano and supported by the issue of Bitcoin bonds. A decline in the value of the country’s Bitcoin holdings during the crypto bear market prompted Bukele to attempt to repurchase $1.6 billion in sovereign debt in July 2022.
Bukele sent the following tweet at the time:
“Contrary to what the media has been saying all this time, El Salvador has the liquidity not only to pay all of its commitments when they are due, but also purchase all of its own debt (till 2025) in advance.”
In light of these developments, on Thursday, global markets credit research site Fitch lowered El Salvador’s debt rating from CCC to CC. El Salvador’s “tight fiscal and external liquidity positions and extremely constrained market access amid high fiscal financing needs” were mentioned by Fitch as the reason for the downgrading.
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